I have a nightmare of a short sale with Ocwen right now. Long story short, we went under contract January of this year. Got short sale approval and then applied to IRS for tax lien discharge and received that. Two weeks before closing the buyers lender sends an appraiser out and it comes in $9,000 short of agreed on purchase price due to $9,000 of repairs needed. That was in May. Ocwen claims they have sent the new price to the mortgage insurer, XL Surety, for approval - back in May and they are STILL waiting for a response???!!! The buyers now want to know if they can move in prior to closing so they can keep the utilities on and make sure the home doesn't deteriorate further. Seller moved out in May because she thought it was closing in two weeks, so home has been vacant since May. Can buyers do that without risking the short sale approval? Seller will probably not get relocation assistance since she moved out months ago. So she's okay with them removing that. Thoughts on risks to my seller in this situation? Or legality of leasing this home to buyers? Advice?
It's a very sensitive situation and many lawsuits come to fruition for early move in situations. For example; they move in and the transaction does not close or a myriad of other potential issues. People do this, but it's imperative that everything truly acknowledges the risks in writing and that everything is disclosed. I personally would avoid this type of situation if I had the choice otherwise just proceed with extreme caution and diligence. That would be my two cents.
We now have approval from Ocwen, IRS has agreed to release their lien but Key Bank is being stubborn about their measly $10,000 which represents 50% of original loan amount. What does one do when everyone else agrees and 2nd lienholder won't? Nobody has ANY money in this - everybody is taking a big loss. Seller is getting $2,000 relocation assistance - that's it.