Applications and Commitments

Most mortgage loan relationships begin with a loan application. The application asks the borrower to answer many questions about his or her assets and liabilities, and many more questions about the project.

Loan applications also include a long list of lender requirements including a requirement that the borrower execute a long list of documents he or she won’t even be able to see until the mortgage application is approved.

Lenders also usually ask prospective borrowers to deposit considerable sums when they execute and submit their loan applications and insist that the borrower agree to forfeit the deposit if the loan fails to actually closes.

A borrower who executes one of these commitments and deposits a large sum of money with the lender can easily regret having agreed to execute any document the mortgagee’s attorney submits. Trying to negotiate any document after executing a mortgage application can be extremely difficult if the application provides that the prospective borrower will lose its deposit if the loan fails to close on or before a given date. In these circumstances, a borrower who refuses to execute any document the mortgagee’s attorney chooses to submit stands to lose his or her entire deposit.

Clearly, the time to negotiate the most important issues presented by mortgage loan documents is when the mortgage loan application is submitted. Yet, most real estate attorneys tend not to negotiate mortgage loan issues until the mortgage loan application is executed by the prospective borrower and submitted to the lender

The Halper Firm’s attorneys have been negotiating mortgage loan commitments for borrowers for more than fifty years, and they do not wait until the application is executed before negotiating the most important issues.

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