I have a construction loan but first horizon is in bankruptc

Waltonjayson · Joined: 24 Jun 2008 Posts: 1 1.39 Dollars($)

I got a one time close construction loan about 7 months ago. So now that the house is almost finished we found out that First Horizon has gone in to bankruptcy and our broker is telling us that there is nothing we can do but find another lender, even though we have been through closing with first horizon and they have forked out all the money for construction. I am being told we have to find another lender and pay closing costs again in the amount of about 6000.00. Seems how first horizon already guaranteed the loan can I make them stick to the contract, and then they can sell the loan if they want. Thanks in advance any help you can offer.

brian1 · Posted: Tue Jun 24, 2008 10:28 pm Post subject:

I would contact the bank. The broker may be looking for another loan?
He may be correct but you will always question it if you dont find out for yourself. Just because they are BK doesnt mean there isnt someone to talk to

Brian

Jeanette · Posted: Wed Jun 25, 2008 5:04 am Post subject:

WaltonJayson,

When a bank files bankruptcy they are out of commission but this usually means that the mortgage lenders’ book of mortgages will be sold at a steep discount to another bank or company willing to take the risk. At that stage the you the borrower will receive a letter stating that their mortgage is now being held by a different company. You will start sending mortgage payments to this new company.

Consult your bank as Brian stated for clarification.

Best Regards,

Jeanette Smith
Mortgage Planner
Union MOrtgage Group

gmakerley · Posted: Thu Jun 26, 2008 6:19 am Post subject:

let me first say this - first horizon home loan is NOT in bankruptcy. where nasty rumors like that get started is hard to fathom.

what has in fact taken place is that the one-time-close product has been dropped. this does not necessarily mean that jayson cannot get permanent financing (an end loan). what we surmise is happening is that the broker he is involved with is frustrated because there won't be a fee coming his way on the end loan, so it's now time to shop it around to a new lender so he can get paid (again).

unfortunately, i hadn't checked the posts here, but jayson is aware that i am working on this situation to try to get him some answers. i work for the retail division of first horizon, and this loan of his is clearly one that exists in the wholesale division; but i've been in contact with wholesale people and we are attempting to iron out this issue with the least possible negative ramifications, trying to cause no harm to come to jayson, whether emotional or financial or otherwise.

jeanette, you are correct about what happens when a loan gets sold...however, this has not taken place in this situation. construction loans do not get sold. if an end loan is made, that may very well get sold, but that's a whole different topic for a whole different day.

i hope i've been able to shed some light on the topic for all of you, and i hope we can put to rest rumors that have no basis in fact.

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