Seller received the loan approval letter from BOA on 8/14/11 and the HAFA program approval letter was sent out to seller with the same date of 8/14/11.  Does the 120 days start from the date of that HAFA approval letter, even tho' though the signed purchase contract was with BOA since May waiting for approval?  Reason for asking is that this buyer may back out under their 10 day inspection period due to costly repairs needed and I would need to get another purchase contract in under the 120 days time frame.

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It is my understanding that the period starts based on the date of the HAFA letter.   On another note, I now make Buyers sign an Addendum that requires them to do their inspection within 17 days of Seller acceptance so that if they are going to back out based on condition, I know a lot sooner rather than later.  After the 17 days, the only remaining contingencies are loan and appraisal.  The Buyers must wait no less than 90 days for the approval.  If they cancel, then they lose their deposit.  I have not had any fall out since I started using the addendum.
Thanks for your input.  I do lock them in for a 90 day wait period (re: their earnest money), but I think you're right by having them do their upfront inspection. That way even tho' they don't know if they will get loan approval, they will know the condition of the house and if they want to hang in there.  Thank you.

Christy Brock said:
It is my understanding that the period starts based on the date of the HAFA letter.   On another note, I now make Buyers sign an Addendum that requires them to do their inspection within 17 days of Seller acceptance so that if they are going to back out based on condition, I know a lot sooner rather than later.  After the 17 days, the only remaining contingencies are loan and appraisal.  The Buyers must wait no less than 90 days for the approval.  If they cancel, then they lose their deposit.  I have not had any fall out since I started using the addendum.
It starts from the date of the contract with Bank of America. Either the RASS or the ARASS.
Can you email me a copy of your addendum please?  I like the terms:) 

Christy Brock said:
It is my understanding that the period starts based on the date of the HAFA letter.   On another note, I now make Buyers sign an Addendum that requires them to do their inspection within 17 days of Seller acceptance so that if they are going to back out based on condition, I know a lot sooner rather than later.  After the 17 days, the only remaining contingencies are loan and appraisal.  The Buyers must wait no less than 90 days for the approval.  If they cancel, then they lose their deposit.  I have not had any fall out since I started using the addendum.

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