We are trying to finalize our new one-time close construction loan. The builder stalled and did not complete the build, leaving 40k in unused funds (draws). The one-time close, single-close, loan was for 290k, we had draws for 250k, conventional loan, our lender said would be sold to Fannie Mae.

We were told we could modify the loan amount and interest if we did not use all the loan money at the end. This is also stated on the Residential Loan Contract.

House is appraised for 315K

Our lender says we are legally bound to sign the loan for 290K even though the amount used is for 250K and make payments, based on 290K for at least 8 months. Then we can do a recast for an additional $250.00, which is to lower the principle amount, when we are sold to a new servicer.

We have hired 2 different lawyers who both say it is what it is!

Any help?