Agent says pay-off to 2nd out of escrow off HUD...
Hey all! I need some advice here as I'm desperate to not lose this house I love. I've been waiting on this short sale to come through for a while - since early Feb when we submitted and gave generous earnest deposit. The 1st (Wells) has agreed to my offer and the 3% back in closing with a 3k payoff to the 2nd. The 2nd (BofA) wants 15% to release (100k owed). The seller was able to come up with a couple grand and I agreed to pay the difference to get the deal done - put it in writing on the ratified contract and signed. Now - a couple days later after we've already ordered inspection, appraisal and loan docs are moving the sellers agent says the amount the seller has agreed to pay and the difference I agreed to pay cannot be shown on the HUD and will have to be paid outside of escrow. My real estate agent says this is suspect and is skeptical. I agree - when I was told this I instantly thought "What next?! Non-sequential $20 bills in a money bag behind the 7eleven"... First off - how can any amounts written into the ratified contract NOT be shown on the HUD? Secondly I really really love this home and do not want to lose it - is there a way to make this work? What happens if I pay outside of escrow to have the 2nd released and selling agent walks, bank pulls out, etc?
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Tony. Have the escrow agent place the amounts on the HUD as a POC (paid outside of closing) item. Your concerns are valid. The 2nd lien is a title issue and the title company needs to make sure it is paid off. The listing agent just needs to tell the lender this is the way it's going to be handled.
A POC item on the HUD will not be included in the totals on the HUD. It's just a line item stating that these monies are paid outside of closing. Then you bring to checks to closing. One to the closing agent for the purchase and one for the POC item. Simple
I just wrote an article about this that may help. The comments are very interesting. CHECK IT OUT
OF COURSE I AM NOT AN ATTORNEY NOR DO I PLAY ONE ON TV. THIS IS JUST MY OPINION.
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Permalink Reply by Tony on
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Wow - great article! In doing this and having the amounts shown to pay-off the 2nd on the POC does it by-pass the 1st's position that the 2nd should only get their 3k? Or will the 1st have to agree to allow this payoff still?
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Thanks Tony. The 1st will still have to approve the final HUD. However I don't think they will see it as an issue. If they do then the sellers agent needs to be firm and point out that passing funds that are not on the HUD is possibly illegal.
Give them options...either it goes on the HUD as a POC item OR the lender(s) and the title company put something in writing that they are aware of these funds changing hands. I hope this helps. Let us know how it turns out.
Tony said:Wow - great article! In doing this and having the amounts shown to pay-off the 2nd on the POC does it by-pass the 1st's position that the 2nd should only get their 3k? Or will the 1st have to agree to allow this payoff still?
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Permalink Reply by Cathy Baumbusch on
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I am in the same EXACT position.
Wells Fargo (Freddie Mac investor) is the 1st and Wells Fargo is the 2nd.
1st trust said that if we could work something out with the 2nd trust OTHER THAN the funds coming from the SELLER, then it would be approved.
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