What to do when someone else's dog ate our coop stock certificate?
April 24, 2017 3:58 AM   Subscribe

We applied for a mortgage refinance back in September (on a jumbo loan in NYC, so it wasn't easy to do). By December, we were approved for a loan, we submitted all our paperwork, the coop submitted their paperwork, and we were in line for closing - all we needed was the mortgage servicing company to produce the original coop stock certificate to hand over. It didn't happen.

Our current mortgage servicing company was supposed to produce it. Now they're saying they're not quite sure who holds it, but they don't have it. So our only option would be to have our coop create a new stock certificate for the closing to go through. The new lender didn't see this as an issue, and requested the servicing agent to send a letter verifying that they couldn't find the document, and promising to destroy it, should it turn up later, so that we can have a new one issued. The current servicer is refusing to do that.

Because of this, as of two weeks ago, we missed the last possible extension on closing, and have officially lost our rate lock. Our appraisal has also timed out, and our coop will have to resubmit their paperwork to the bank (which means we have to pay all those fees again as well), all because too much time has passed. We are stuck.

We submitted a formal complaint to the NY State DFS (Department of Financial Services). But that won't help us if our lock is gone.

What do we do next? Do we have any recourse? We really need to refinance - we're at 6.5 % and it's killing us - no wonder our current lender is dragging their feet. Is there any way to hold those feet (or any others) to the proverbial fire?
posted by my left sock to Law & Government (10 answers total)
 
Has the new lender said absolutely nothing can be done?

I've found the rate lock can often be extended as a matter of courtesy (or for a fee). Id spend some time speaking with your agent and making it clear this wasn't your fault and youd like for them to extend the rate lock.

If you're starting from scratch anyway I would start shopping around with other brokers to see what rates you can get and make it clear to your lender they're about to lose you if they can't extend.
posted by Karaage at 4:11 AM on April 24, 2017


Complaining to DFS was a good step -- you might also complain to the New York State Attorney General's Consumer Protection Bureau: https://ag.ny.gov/bureau/consumer-frauds-bureau .

Other than that -- have you exhausted the possibilities of shouting at your current mortgage servicer? They are refusing to do something reasonable for you, and their refusal is costing you a lot and making them money. You may have escalated as far as you can, but if there's more to be done in terms of asking for supervisors, and explaining that what they are doing is committing fraud and you have complained to some of the relevant authorities and plan to complain to others, I'd keep going with that until you were sure there was no one else to talk to.

Do you have a lawyer who could write a letter to the servicer saying the same? Maybe the coop's lawyer, if they're in a mood to be helpful?
posted by LizardBreath at 5:09 AM on April 24, 2017


You can also submit a complaint with the Consumer Financial Protection Bureau if you want to keep the complaint pressure on.
posted by snaw at 7:22 AM on April 24, 2017 [1 favorite]


What did the coop's attorney (or your new lender) say would happen next now that the current servicer wont say that they will send back the certificate should they find it? im no lawyer but I'd think that there must be a mechanism to create a new certificate, declare any existing ones, should they ever resurface, void, and notify the old servicer that it has happened. It would be nice if they signed a letter saying they agree, but there must be some alternate process if they wont.
posted by Exceptional_Hubris at 7:31 AM on April 24, 2017


I had to read this twice to be sure; your current mortgage holder does not have an essential document for their ownership of the mortgage and refuses to provide any help or documentation to replace the document they lost?

I hate to be the one to recommend a lawyer, but if I were you I'd be calling a lawyer.
posted by Nelson at 7:48 AM on April 24, 2017 [3 favorites]


Has a copy ever been filed with the county or other government agency? Or in old coop records? Maybe there's a governmental or coop process to extinguish the rights of the old mortgage company.

If at all possible, go in to a physical branch and talk to a real person. It might get this resolved.
posted by littlewater at 7:56 AM on April 24, 2017


While you should definitely file the additional complaints mentioned above, given the time constraints involved, this is a situation where you need to get a real-estate lawyer. A sternly-worded letter will probably have faster results, especially given that the CFPB just brought suit against a leading servicer, Ocwen.

It sounds like your coop board already knows about this, but, if not, make sure they do. You all have an interest in making sure your shares are as liquid as possible (outside of the inevitable coop restrictions, of course).
posted by praemunire at 7:57 AM on April 24, 2017


Best answer: This happened when I refinanced, at least once. I was advised that it's extremely common for mortgage servicers to lose share certificates and the coop's attorney had no problem issuing another one right away. It caused no problem for me. I can't speak to the timing in your case and why it caused you to miss deadlines. Maybe this is just one of the reasons that real estate transactions should be closed as soon as possible, well before any deadlines.
posted by JimN2TAW at 11:05 AM on April 24, 2017


Real estate lawyer. NOW. PM me for recommendations.

The coop attorney will need the servicer to produce an affidavit of lost stock and lease. By extension, you need this as well. When proper procedure is followed, this must be done in a certain timely fashion.

(Does this servicer's name rhyme with Beterus, or Bocwen?)
posted by Sticherbeast at 1:07 PM on April 24, 2017


Also: who's the bank attorney on your refi? Jousting with your loan servicer about this should really be their job. Their job is to make sure that this gets closed properly.
posted by Sticherbeast at 1:54 PM on April 24, 2017


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