Q: As a buyer, why wouldn’t I receive a PYT Loan Commitment?
Buyers must meet the credit requirements of the program. This is why it is so important to be proactive and provide all the necessary documents needed for the underwriter to approve financing.
Q: I am a buyer, and I just found out I qualified for PYT how will I receive my loan commitment?
Your Lender and/or agent will make sure you have everything you need! We think getting a PYT Loan Commitment is a pretty big deal, and chances are – we’ll come celebrate with you!
Q: As the buyer, why would I opt to assign the assurance (liquidated damages) to the seller (via escrow)?
By assigning a percentage of the assurance (liquidated damages) to the seller (via escrow), some buyers believe it may strengthen their offer.
Q: I received an offer with a PYT Loan Commitment, what should I do next?
Visit the “Verify Certificate” page at www.protectyourtransaction.com type in the certificate number to check on its status.
Q: I’m the seller, is there anything that could disqualify me from the Protect Your Transaction Program?
Any action made by the seller to impede the timely closing of the property or to act in any manner inconsistent with the purpose of the purchase and sale contract.
Q: As the seller, if the closing fails, do I get the monetary assurance?
If the loan doesn’t fund for a reason other than those excluded on the PYT Loan Commitment the funds would be disbursed to the buyer. If the buyer decided to assign a portion of the funds to the seller this would take place with the help of an escrow agent.
**The disbursement of funds to buyer (or into escrow if buyer assigned the liquidated damages to escrow) will happen promptly after the exhaustion of all contractual extensions afforded the buyer and delivery by the Seller of a notice of cancellation of the transaction in accordance with the terms of the contract. Further disbursement will be made by the escrow agent pursuant to the terms of the escrow instructions.
Q: Are certain property types excluded from the program?
There are a few property exclusions; co-ops, non-warrantable properties, flips, short sales, and non-residential properties.
**Included; but not limited to the property types listed
Q: At what point in the timeline, is the PYT Loan Commitment issued?
The loan commitment can be issued as soon as the underwriter has the documents that are necessary to make a decision regarding creditworthiness.
Q: Why would a PYT Loan Commitment be cancelled?
A: Each PYT loan commitment requires that the buyer(s) not do anything during the process to reduce their creditworthiness. For example: quitting a job, reducing income, or incurring new debt.
** Each commitment has exceptions for items not cleared prior to the commitment being issued. The most common examples are: title commitment and appraisal because the property is often unknown at time of issue.
Q: Are there any other events that would cause the PYT Loan Commitment to not be issued?
Each commitment has exceptions for items not cleared prior to the commitment being issued. If in meeting the exceptions, a property address is obtained and the property is cleared to close, the commitment would not be issued.
Q: Does PYT cost anything?
With PYT, there is no cost to the buyer or the seller. The PYT program is simply a Lender's commitment to provide great customer service and back up that commitment with a financial assurance.
Q: When does a PYT Loan Commitment Expire?
The PYT Loan Commitment expires when the credit documents (Such as; income documents, asset documentation, and credit documentation) and associated with it expires.
Q: Is the assurance (liquidated damages), if paid to the Buyer, a taxable event?
Yes, the payment is considered a taxable event (Reported to the IRS on Form 1099-MISC).