Lender Refusing to Process Purchase Loan
I am working on the seller's side of a short sale. The buyer's mortgage company is refusing to process a VA purchase loan until a written letter is received from the servicer/investor accepting the short sale. A pre-approval was issued and then all activity was stopped. This is a breach of contract but the buyer"s agent and mortgage company don"t care. I have also been told the mortgage company's refusal to process is out of compliance with Federal loan regulations. Has anyone had a similar experience? Thanks for any comments.
Replies to This Discussion
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Permalink Reply by Wayne Brooks on
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The mortgage company is not a party to your contract, so it is not a breach, if the mortgage company is waiting. Maybe they are willing to continue, but require application/other fees the buyer doesn't want to pay, until they know it's approved?
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Permalink Reply by Jeff Payne on
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Glenn, not sure I follow, you want the buyers lender to process the buyers loan without a short sale approval? How is it a breach of contract?
I have never and would never want buyers lender to process the buyers loan without a written approval letter.
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Permalink Reply by Joseph Alfe on
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The buyer's lender is absolutely, 100% incorrect. They cannot issue a FINAL approval until the short sale approval is received by them, but they absolutely can and will underwrite the loan and issue a CONDITIONAL approval, subject to short sale approval. Once short sale is approved, they will re underwrite and issue final approval. You need to contact buyer's lender underwriter or their manager and set them straight.
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