The loan docs that took 3 months because of one missing comma

I was working on a small mixed-use deal in Austin last year, a 12-unit building with some retail on the ground floor. We thought the financing was all lined up with a local bank, just needed to get the paperwork signed and funded. But the legal team caught that the borrower's LLC name had a comma in it on the signature block, while the operating agreement didn't have one. The bank's underwriter said they couldn't budge, so we had to file an amendment with the secretary of state to add that comma. That one little thing took 11 weeks to process, and we almost lost the earnest money deposit. By the time the docs were ready, interest rates had shifted and we had to renegotiate the whole deal. Has anyone else had a tiny typo or formatting thing blow up a closing timeline like that?

2 comments

2 Comments

sethr112d ago

That's a brutal way to learn how picky lenders can get...

barnes.shane2d ago

Three months over a comma sounds like someone wanted to walk away from the deal but had to make it look like the borrower's fault... I've seen that trick pulled before. The bank's underwriter could have just signed off on that discrepancy with a simple waiver letter, they do it all the time for bigger things like missing tax returns or appraisal gaps. That secretary of state amendment feels like an excuse to kill time while they shopped your rate around to other borrowers. The interest rate shift that happened afterward just proves my point, they were waiting for rates to move so they could reset the terms in their favor. A comma is nothing, I've had borrowers sign with their nickname instead of their legal name and the bank just had them initial it and moved on. Sometimes these "technical issues" are really just the lender getting cold feet and using the paperwork to cover their decision.