Per Diem Charges and Personal Responsibility

Today finds me in the middle of what I’ll generously call a debate with a loan office about the per diem charges our mutual client is facing due to not closing on time.

On the vast majority of bank-owned homes, the lender addendum includes language that a per diem fee will be charged for each day beyond the scheduled close that the actual closing takes place.

To date, I’ve yet to have a client run afoul of the per diem. Of course, to date, I had not had a client choose this particular lender.

The per diem charge would have not been an issue had the file not spent nine full days in the underwriting department, largely because a couple of the lender’s underwriters had gone on vacation.

When a file spends nine days in underwriting and the underwriters then add a rather complicated condition that, while it will be cleared, cannot be cleared in one hell of a hurry, closing on time is virtually impossible.

Most lenders with which I’ve worked, if they are unable to close a file on time, will take responsibility and do right by the client. Not these folks. Instead, the loan officer has taken it upon himself to teach me about real estate contracts based on his vast experience of never, ever writing or negotiating a contract.

It’s a bogus charge, he said. Simply negotiate an extension (even though I’ve already been reminded this morning of the per diem by the listing agent.)

Of course they wouldn’t want to see a deal fall apart over a couple of hundred dollars (even though it’s a very strong sellers market and the house wouldn’t last more than a week on the open market before it was purchased by someone else.)

All of us make mistakes. The question is whether we’re man professional enough to own up to our errors and do right for our clients. From this lender, it’s not looking good.

Image: scottchan /

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at


  • Another Investor 6 years ago

    It’s too late to switch lenders on this deal, but I would advise future clients thinking of using this lender of your bad experience.  After the deal closes, I would let the management at this broker or bank know you will be recommending against using them in the future, because of the poor client service.

  • Jonathan Dalton 6 years ago

    That’s a definite, AI … I’ve made it clear we need to get this done and then go our separate ways. Once I can find a manager there, I guarantee you the full rundown (which includes more than just this) is coming.

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