No. of Recommendations: 4
Hi Kmart,

Is this true? Does Chase no longer do loan commitments?? This smells fishy...
Sounds more to me like a typically confused real estate agent.

An amazingly high percentage of realtors (even after years of 'experience') assume that a "loan commitment letter" actually means that the lender has irreversibly committed to funding a loan... which could not possibly be further from the truth (and never has been the truth.)

In reality, lenders issue "CONDITIONAL loan commitment letters" which generally say, in very CYA language, "we *may* fund up to $X for this purchase, as long as the following list of conditions are sufficiently satisfied..."

Then there is a "conditions" or "stipulations" list that may run up to 50 items, or more... always including "and/or any additional conditions determined upon review."

In essence, a "commitment" is only final when the very last condition is satisfied... and you know what that very last condition always is?
> Closing agent's certification of proper funds distribution

In other words... the 'commitment' is only reliably final when the checks clear, regardless what language there is in the lender's commitment letters.

Dave Donhoff
Leverage Planner
Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.