Legal Question in Real Estate Law in California
Contractual term ''on or before''
The loan papers for the purchase of my home stated that ''Loan must fund and record on or before 11/09/04. This date had previously been extended and this was the final date. I put in cancelation instructions to escrow on 11/4/04. I did not want the loan and the Mortgage Broker was doing things that I did not understand. Now the 9th came and went with no closing. On 11/10 I called the title company and they advised that title had been canceled also that no other title order had been opened. I told them I wanted proof just to be on the safe side. So they faxed me a printout showing all of the activity on the file and it clearly stated the file had been canceled and the wire returned. Then the same day a reciecved a letter from the servicing company stating that they had recieved confirmation from the lender that the loan was canceled on 11/9. Much to my dismay they closed the file on 11/10 after I had proof in hand it could not close. If the lender was going to close the file after the on or before date of 11/9 that the loan docs state wouldnt they have had to contact me or get my signature to extend the date. I am being told that since it was to benifit me they could just do that at will. So what good is a contract.
2 Answers from Attorneys
Re: Contractual term ''on or before''
Contracts are only good if you are willing to enforce them through litigation. You can have the contracts (escrow instructions are contracts) reviewed and get advice on your options.
Re: Contractual term ''on or before''
After reading your facts twice, I'm still not sure who supposedly breached a contract, and if anyone did, what harm occurred. The best I can do is imagine that the lender funded the loan a day late, after you attempted to cancel it, and that the broker is claiming he's entitled to a fee for having generated the loan.
I would then say that if the "loan papers" contained a "time is of the essence" clause, the broker is not entitled to a fee. Absent such a clause, I would say that the "on or before" language is probably sufficient in and of itself, as it is a pretty definite deadline.
Now comes the real question. November, 2004 is a heck of a long time ago. Is this matter in litigation? Should it be? Remember that there is a four-year statute of limitations (from the date of breach) for suits based on a written contract.
But if you're already in litigation, you should include pertinent facts in your LawGuru question including whether you are already represented and if so what your current attorney is telling you.
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