So it seems to be a growing trend now that a buyers lender is demanding to see the lenders full blown short sale approval letter, not just the cover page with all the terms. In the past i have always taken the approval letter and removed the SS# and Loan# for obvious reasons. I got a call yesterday from a buyers lender demanding to see all the pages of the approval letter, that clearly have no information that they would need. They told me that they are getting bombarded with Realtors who are faking short sale approval letters to keep buyers around or maybe to buy themselves some time until they get a real approval.
I'm calling our legal hotline tomorrow when its open, but i wanted to see if anyone had ran into problems with this lately? I would hope the NAR would weigh in on the issue. Seems as though we as Realtors are opening ourselves up to all kinds of legal problems if we start giving out anything a buyers lender demands just because we have scumbags ruining it for the rest of us.
Thanks!
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There is nothing without Short Sale Approval. It is a huge waist of time for a lot of people to have inspections and financing done prior.
Moreover, many lenders insist that they will not START the buyers loan without approval. This is totally false. They can and will issue a conditional loan approval, with short sale approval being one of the conditions. To delay the start of a loan when approvals are only good for 30-45 days is foolish and dangerous and I will not allow it.
Had a Lender today state that the Seller needed to sign the Approval Letter prior to underwriting granting Loan Approval.
Yes, final approval. They can grant conditional approval
Whats the big deal? .. is the borrower a celebrity?
I guess the listing addendum is worded differently to the buyers addendum,our CAR listing short sale addendum makes no mention of short sale approval being sent to anyone - unless I totally missed it!
Here in CA. the buyers agent sends the California Association of Realtors short sale addendum with the offer and it states that
"This agreement is contingent on Seller's receipt of and delivery to Buyer of written consent
to the Agreement from all existing secured lenders and lienholders."
When the seller signs this in the offer they agree for the approval to be released to the buyer.
Since as listing agent I would not approach a buyer directly, I take this to indicate that the approval be delivered via the Buyers Agent. Once I have done that I have, I believe, fulfilled my duty.There is nothing in the addendum that suggests we should send it to the buyer's lender directly. I prefer to do what CAR tells me I should do - that way I cannot have a complaint made against me to them or the DRE for doing something else!
Since there is controversy over what is the correct, legal and ethical thing to do perhaps CAR and other state associations should re-evaluate their short sale addendums.
Rita Legan said:
Would a letter from the title company, saying they are in receipt of the approval letter be enough to satisfy buyers lender?
With the seller's permission, I provide the approval letter to the buyer's lender - not the buyer and not the buyer's agent.
There you go Stephen, I do the same. I see no point in doing otherwise...
Stephen Shafer said:
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