Is it hostile? Maybe. But with just $2,000, a Melville-based lender is planning a business takeover.
Continental Home Loans will offer its own $2,000 “economic stimulus” for borrowers who qualify for the federal home buyers' tax credit and want to switch lenders because they have yet to close.
The firm wrapped up 98 percent of the credit-eligible mortgages before the original June 30 closing deadline for up to $8,000 in tax credits, said chief executive Mike McHugh.
So now, the newly-extended closing deadline of midnight Sept. 30 has left Continental not quite sitting and twiddling its thumbs but sitting and thinking.
“We we're saying OK, what about all those people out there who have not gotten their loans done for whatever reason,” McHugh said. “Most of these people have been sitting, either jammed up at other companies or whatever, and some may even have said ‘Let’s look someplace else.’ We want to be the place they look.”
The $2,000 would first be taken off the closing costs and then the principal if anything’s left over. Borrowers in the 20 states where Continental is licensed can get the incentive, but McHugh has no estimate on how many would switch.
What he does say is that hundreds of people – borrowers, real estate agents, attorneys and more – begged Continental to do their loans during the four or five weeks preceding the original closing deadline. About 80 percent of those callers complained that their lenders were too swamped to close, McHugh said.
“We’ve had sales people call us from other companies, tremendously upset that their companies couldn’t close these loans in time,” McHugh said. “It was desperation come the end of June. People lost sleep.”
Borrowers who leave their current lenders may have to pay fees for appraisals and other expenses if they haven’t already.
When Continental takes over another lender’s client, the mortgage work won’t have to start from scratch because the credit reports and other documents have been gathered, McHugh said. He thinks three months would be enough time to close.
“There are a pool of people who are dissatisfied and we would like to help them get through this as quickly as possible,” he said. “There are a lot of people who are afraid they’re going to lose this [tax credit] again."