I have a first with Nationstar and have approval. The max they will pay and allow the 2nd to get paid is 6,000.
I have the approval from the 2nd with a payoff amount of 13,500.
The buyer was willing to pay the difference in escrow but the 1st is making us remove it from the HUD and will not allow the 2nd to get more than 6,000.
The 2nd told us to pay it down to 6,000 prior to coe so it would not be on the HUD.
Is it legal for the seller or listing agent to do this in advance and then get reimbursed from the buyer after coe?
How in the world can we get this resolved????? Want to do it the right way. Any feedback from anyone who has experienced the same situation?
By the way the property is in California.
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Wanted to give everyone an update on this issue I had with Nationstar and the 2nd. So, Nationstar is the 1st and the investor is Fannie Mae. You were all correct in saying Fannie Mae will only allow 6,000 to go towards the 2nd, no exceptions.
The 2nd still wants 13,500. The seller is paying it down to get the approval at 6,000 so we can close.
thank you for all your input on this one. We should be closing next week :)
I'm having similar issue 1st ( Nationstar / FNMA ) is only allowing 3k to go towards the 2nd. The 2nd ( CCO ) is stating that they are requiring 6K. FNMA will not allow any contributions from the buyer to make up the difference. I requested that the asset manager re-submit the file for approval with the 6K going towards the 2nd , however, today I was told that the request was denied. FNMA stated because that they are accepting an offer below their min net required they will not allow any additional monies to go toward the 2nd: The 2nd will not budge either on the 6K. I went to the SSAD and had no luck their as well.
Please Advise
Is a cash transaction? If it is then RESPA does not apply and the extra payment can be made completely off the HUD at closing with no issue.
Personally I would not even ask the 1st if it's ok. Once the buyer agreed to pay the difference I would have just moved towards getting the approval and closing. Place the extra funds on the HUD( if you have to for RESPA) as a POC to the buyer and close the deal. I've never had a lender question that.
Of course be sure to seek advise from your broker or attorney on this.
No, it is not a cash transaction. The problem is... Nationstar requested a copy of the 2nd approval letter which showed a payoff amount of 13,500. The HUD showed Nationstar as paying Chase 6,000 and then on the buyers side it showed the contribution towards the 2nd in the amount of 7,500. Our approval expired and in order for them to issue a new one they want to see the new approval from the 2nd showing only 6,000.
I have escalated the file to see if we can get this resolved.
Thank you for your response...
Thanks, Bryant. I learned from your comments.
"Is it legal for the seller or listing agent to do this in advance and then get reimbursed from the buyer after coe?"
You should consult an attorney before using any of this information.
To our understanding the seller owes money to a lender. There is no rule baring them from making payments to the people that they owe money to. It is illegal for them to be required to per SB458. The limits to the situation begin when you start to add other parties into the mix. Also, the client needs to take the risk that their lender could choose to not issue an updated approval letter. It is also possible that if an approval is issued and it later requires an extension again you could come across another problem. Again yet another scenario is if the buyer falls through and you need to start over then at that time they could come up request more money again. Short sales tend to be an art and we find that for the agents we manage their files for them this can be as sensitive as it gets when it comes to managing the timing and reducing your liabilities.
Again before proceeding with any decision make sure to consult an attorney.