Sharing short sale approval letters with buyer's agent....pros and cons? Does buyer's agent need to see letters?
The buyer's agent says : "We would like to see what the letter is offering, that shouldn't make a difference and really no reason to hold it from us...Right? I have never had an agent hold the letter received from a bank before waiting for the others, is there a reason we can't have it?"
Listing agent says "I’ve never had a buyer’s agent ask me for copies of the letters. All they wanted to know is whether or not the short sale is approved. The conditions of the approval is between the lender and the borrower. "
The first letter states
1) what they want to net after expenses, and
2) that the basis of this approval is on a sales price stated in the contract.
Because second lien holder is not yet received, no one knows what the payoff for the second will be, what expenses will be paid out of the difference between what the first wants to net and the sales contract.
Both loans with Chase.
Do you share approval letters as they come in? Do you share them at all?
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Pacita. I always end the approval letter over to the BA to release the contingency. BUT I edit it. I take out any information related to terms and conditions and of course any personal info related to the seller. I use a PDF editor. The BA would have no clue that info has been removed. Terms and conditions of the approval are confidential info.
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Permalink Reply by Van Bui on
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Pacita, I share approvals with BA if requested. Some buyer's lenders require approval letter as a condition of funding.
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Permalink Reply by Tim Harrison on
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@Bryant: I really like this site and also agree with you about mortgage fraud in your write-ups. But I think you may need to clarify something or more likely change what you're doing concerning editing bank approval letters. Digitally blacking out words on a document is one thing but using an editor to create a "new" legal document is never going to lead to a good outcome.
The approval letter comes from the bank but if you alter the approval letter than that's coming from you. What happens if the bank sees this altered approval letter? Someone is going to have to do a lot of explaining. Some people may consider it forgery.
At least letting the recipient (BA) know things have been altered and/or typing on the document something like "certain words have been deleted" should help. But when you wrote this "The BA would have no clue that info has been removed" it sure sounds like you're trying to deceive.
Once again, I commend you on all the good info you put out but if what I described is true then I disagree with you 100%.
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Permalink Reply by Juan Reyes on
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The BA and specially the buyers should have a copy of the letter for the simple fact that the letter states that once funds are received, lender will execute a release of lien.
What happens if they don't execute the release of lien properly and 10 years from now when the new owner wants to sell they find an unreleased trust. Yes, I know title insurance will take care of it, but if you have the letter it makes it easier for the title insurance company to clear up any issues.
When I send an approval letter to BA I white out certain info such as account # and any personal info of the seller. Other than that I send the letter as is.
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Tim. I edit out account numbers, social security numbers and any other info that is personal to my seller. That's it. It only goes to the BA. I personally don't see any issue with this as the BA is not a party to this document. You may have a point though. I will explore this further. We are certainly not trying to deceive. But the BA does not need to know certain details. Thanks for pointing this out.
Tim Harrison said:@Bryant: I really like this site and also agree with you about mortgage fraud in your write-ups. But I think you may need to clarify something or more likely change what you're doing concerning editing bank approval letters. Digitally blacking out words on a document is one thing but using an editor to create a "new" legal document is never going to lead to a good outcome.
The approval letter comes from the bank but if you alter the approval letter than that's coming from you. What happens if the bank sees this altered approval letter? Someone is going to have to do a lot of explaining. Some people may consider it forgery.
At least letting the recipient (BA) know things have been altered and/or typing on the document something like "certain words have been deleted" should help. But when you wrote this "The BA would have no clue that info has been removed" it sure sounds like you're trying to deceive.
Once again, I commend you on all the good info you put out but if what I described is true then I disagree with you 100%.
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Permalink Reply by Karen Mathers on
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I think the buyer's agent has to have the letter. If I am working with the buyer and I don't get a copy of the letter . . . then we do not have a bank approval. I had one agent that had a negotiator who made up their own letter. When we finally got a copy of the real letter, we found the close date was changed and the commission. If you want another agent to advise his buyer to sit and wait on one of your short sale listings then you need to be upfront about what is going on. It is only fair.
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Permalink Reply by Len McGuirk on
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I personally handle many short sales. I have never had a problem sending the approval letter to a buyer's agent. There really isn't much info on the approval letter than is confidential anyway. I have received blacked out approval letters from some listing agents when I am the buyer's agent. I don't see the point in blacking out some of this info.
First of all, the loan numbers don't really mean anything anyway. Once the short sale is completed, the loan numbers will no longer exist anyway. It's not like the bank will disclose info to a non-authorized party just because they have the loan number.
Second, the negotiator's contact info shouldn't be blacked out either. It's nice to know that there is a legit person's contact on the letter in case the file ever went to litigation between the buyer and seller. It's not like the buyer or the buyer's agent could even call the bank and speak with the negotiator about the file if they are not authorized either.
Now if there are social security numbers on the approval, I can understand this info being blacked out.
I am definitely a true believer in sending everyone the approval letters so everyone is on the same page of moving forward in the transaction and that the short sale contingency has been removed. It also helps a buyer's agent to have the approval because many approval letters will specify the terms and figures of the approved costs, such as the typical Bank of America approval letter. They would then know if the buyer's closing costs are being paid as well as the commissions, etc.
ATTN: Short Sale Listing Agents: If you receive the approval on a short sale, don't get a power trip and decide not to disclose the necessary info to all parties. After all, everyone in the transaction has the same goal, to successfully close on the deal and move on.
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Permalink Reply by Laurie Clark on
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DO NOT Share them. The buyers will get a copy and I am suspicious that the buyers on my short sale deal have enough information to fake like they are the home owner or me the agent and talk to everyone. I did not realize it until the puzzle started coming together. When I call people and they say I just talked to you. Or yes I spoke with you the other day. Uh no, it was not me. All along it was the buyers wife. Now they don't want the short sale. they are waiting for the short sale approval letter to expire so they can buy it through Freddie Mac 30k cheaper. Snakes!
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Permalink Reply by ElizabethWeintraub00697006LyonRE on
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I send the approval letter because the buyer's lender requires it. But I adjust the fees before the approval letter arrives and get the buyer's signature in writing that the buyer will pay the fees not allowed by the bank. I don't ever want my sellers having to pay any fees if I can avoid it. The one fee that is often impossible to get the buyer to pay, though, is the HOA, which is why I suggest that my sellers stay current on the HOA so we don't have that problem.
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Permalink Reply by Jeff Payne on
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I send the approval letter to the title agent and they can confirm with the buyers agent if there is indeed a short sale approval. IMO, that letter is not needed for the buyers lender, it is none of their business. The buyers lender needs to know if there is clear title and the title agent will take care of that..
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Permalink Reply by James ferebee jr on
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No I do not because it's between the borrower and the lender.
The end buyer's lender will do their own appraisal to determine the value.
Besides they have never asked to see the approval letter, all they want to know is will the buyer have
a free & clear title and thats already in the paperwork re; contract that the buyer Will have free & clear title.
We also encourage the buyer to purchase title insurance..
Jim Ferebee
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Permalink Reply by Satar Naghshineh on
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Came across this article while researching another short sale issue on the net.
Just want to give my 2 cents. Bryant is correct - Black out everything:
1. seller's info
2. terms
And another thing to black out is the negotiator's or closer's contact info. I had one buyer agent use the information on the approval letter to try to negotiate a better deal for his client. Once bitten, twice shy!
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