After closing on a refinance, can a lender ask for additional documentation before they will fundthle the loan?

Get Legal Help Today

 Secured with SHA-256 Encryption

After closing on a refinance, can a lender ask for additional documentation before they will fundthle the loan?

I recently closed on a refinance and now the lender is refusing to fund the loan without tax transcripts.

Asked on September 1, 2016 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you actually closed, they are obligated to disburse the funds unless they came across information or reason to believe you committed fraud, such as by misrepresenting your income (which may explain why they want the tax transcripts). Or rather: if they refuse to release the funds, you can bring a legal action on an "emergent" basis (think: "urgent" or "emergency") to get into court in a week or two to force them to disburse the funds (though doing this can be procedurally tricky; you'd want to hire an attorney to help you), but they could then allege fraud (which voids contracts, including loans) as a defense. If they could make out a reasonable case that fraud, or something like fraud, is going on (e.g. some other irregularity in your application, etc.), it is most likely that a court would let them delay disbursing the funds until that issue is resolved.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption