Should lender's closing instruction letter contain an explicit deficiency waiver?

I'm about to close on my Chase short sale on June 7. Just got the lender's final closing instructions letter. Unlike the "conditional/preliminary" short sale approval letter mailed in April, it does not contain any language about how the deficiency will be handled, although it did mention again the credit reporting and possible tax consequences, so it's not as if this letter is devoid of anything except settlement instructions.

Should I be concerned that the lack of an explicit waiver in this document will legally allow Chase/Fannie Mae to pursue the deficiency via collections after the closing, since the letter that stated it would be waived was marked as conditional/preliminary? Or is it standard practice (for Chase and/or other big lenders) not to address the deficiency in the final closing instructions?

I should mention that Chase "accidentally" mailed an incorrect version of the April approval letter which specifically did *not* waive the deficiency; when we pointed out the mistake they said it was "impossible" and remailed the original correct version of the approval letter. That may be why I'm suspicious that the closing letter lacks any language.

I'd appreciate any comments ASAP so we can try to have the lender fax a modified copy before closing if folks think it is necessary.

Hi Wendy, thanks for the reply. Yes, I am the seller and yes I already showed it to a lawyer (though he is not very engaged or helpful really), and he said we can ask because the worst Chase could say is no. We've left a voicemail for the negotiator (the only option with Chase unless they initiate the call) with no response. They may only respond if we threaten not to close without it in the final letter. The closing instructions do not say anything about invalidating or superseding the previous letter, but since the previous letter says "conditional" and "preliminary" I'm wondering if that is implicit.

So, im still wondering is it worth it to threaten not to close without an explicit waiver in the final letter, and what chase most commonly does with deficiency language in closing instructions versus initial approval letters. That may provide the information I need to decide.

Thank you!

Replies

Bryant Tutas June 10, 2012 at 12:01am

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- Gary Ando > Bryant Tutas June 10, 2012 at 6:15am
  
  I had the same situation with Chase. They offered to add the deficiency language if the seller made a $3K contribution at closing. He agreed and they added the deficiency waiver language
Wendy Rulnick June 5, 2012 at 11:57am

Mark - Chase approval letters are notoriously "fuzzy". Are you the sellers? If so, you should consider spending a couple hundred dollars and get an attorney opinion on the letter. However, you said they mailed a letter that originally did address deficiency waiver, then the subsequent, final letter did not? Perhaps the final letter did not supersede and override the previous letter unless otherwise stated. Another suggestion, barring the attorney, is for you to call Chase and speak directly with the negotiator.
- Mark M. > Wendy Rulnick June 5, 2012 at 1:50pm
  
  Hi Wendy, thanks for the reply. Yes, I am the seller and yes I already showed it to a lawyer (though he is not very engaged or helpful really), and he said we can ask because the worst Chase could say is no. We've left a voicemail for the negotiator (the only option with Chase unless they initiate the call) with no response. They may only respond if we threaten not to close without it in the final letter. The closing instructions do not say anything about invalidating or superseding the previous letter, but since the previous letter says "conditional" and "preliminary" I'm wondering if that is implicit.
  
  So, im still wondering is it worth it to threaten not to close without an explicit waiver in the final letter, and what chase most commonly does with deficiency language in closing instructions versus initial approval letters. That may provide the information I need to decide.
  
  Thank you!

This reply was deleted.