I knew when I took the listing that I was going to be sorry.
We wrapped up a short sale last week, closed on Tuesday, funded on Weds, in which the first mortgage holder was paid in full, a second and third got shorted. Today I got a call from Nationstar, the first mortgage holder that there was a problem: Their payoff figure was good thru the 14th (a Saturday). That particular Saturday was followed not only by a Sunday but by a Monday that was a legal holiday. Closing was scheduled and took place on the next business day. Unfortunately, the buyer's funding was held up by the typical nonsense that we deal with these days, and the loan didn't fund until the following day, at which point, a full payoff, including the required per diem and an extra day's worth for delays, was wired to Nationstar. They are saying that they want an additional $2900 in legal fees because of the (four day, two of them business days)delay. Or else they are going to reverse the sale. These are the guys who got paid in full on a loan that they hadn't seen a nickel on since August. I am sorry, am I missing something here??? I am biting my tongue clean off to keep from saying what I want to say, but would love to hear any thoughts from others in the forum. I have given this whole dilemma to the attorney to solve (hopefully). I am ready to call the new CFPB with this one.
By the way, this was an $85,000 deal. the payoff of the first was slightly north of $61,000. When does someone at Nationstar say it's time to stop racking up legal fees on a property of this size.
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Let legal handle it. That's really all you can do. As long as the transaction closed as per the closing instructions I wouldn't worry about it. The chance of this closing being rescinded are probably slim to none. I'm sure the buyer would cause more than $2900 worth of legal problems for Nationstar. Come back and let us know how it all plays out.
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Permalink Reply by Becky Martin on
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I agree with Bryant - the buyer could have torn the house down by now...also from who does NationStar think this extra money is going to come from???
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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It's a settlement company / Title Company issue. Let them deal with it.
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Permalink Reply by Chad Gelsinger on
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I would disagree with some of the replies I am reading. It all comes down to the payoff conditions stated in the Approval Letter from the Lender(s) involved. If you had a payoff for January 14, you or the title company should have realized closing/settlement wasn't able to happen by that date. I would be looking for a new Title Company, unless you did not give them the Approval Letter. The payoff date is negotiable and if you cannot settle by that date, you must ask for an extension. The Lenders have every legal right to ask for more money. I would suggest you go back and try to negotiate the $2900 down and look at it as a cost of education. The Lender can come back and cancel the transaction. Let this be a lesson for everyone-PAY ATTENTION TO THE APPROVAL LETTERS YOU RECEIVE FROM THE LENDER! It sounds like no one read the Approval Conditions and followed their instructions. We try to schedule our closings at least a day before the payoff date, just to be safe. If we have to close on the actual payoff date, settlement must occur in the morning to allow funding to occur. I cannot be clear enough on this, you must follow the instructions and terms of the Approval.
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Chad - I agreed with you and I'm surprised the Escrow / Settlement / Title Company actually closed the transaction without the proper extension of closing approval. That's why I feel it's the Closing Company's issue. If this were here in CA, there's no way any of the Title Companies I use would allow it to close without an updated approval letter. Also, the short sale lender can reject the wire of funds for the payoff.
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Permalink Reply by Jill Ford on
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again, this was a full payoff, the first mortgage holder got every dime of principle and 8% interest, along with some other fees on the payoff. There was no "closing approval"
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Jill - apologies - BUT, if it was a full payoff based on the "Payoff Demand" you had in hand, then you would still have to adjust it based on not closing on the Demand date.
What am I missing ?
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maybe a quick reread of the original post--closing agent included 5 days of per diem called for on the payoff statement. I told the first mortgage holder we were moving toward a closing that was going to get them paid in full and they assured me they weren't going to continue any foreclosure action. Apparently though, they neglected to tell their foreclosure attorney, and that clock was ticking in the background.
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Got it ! - Thanks - At the end of the day, I still think it's a Settlement Company issue - it certainly doesn't seem to be your issue.
I feel for you - I'm getting to a point where I won't take short sales with certain short sale lenders and certainly not less than a certain market value for our area. They're just simply not worth it. When all is said and done you're not making anything on this one for all of your time and effort !
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This was not an APPROVAL letter, this was a payoff statement, with a stated per diem. These guys were not short, so no approval letter was necessary.
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Permalink Reply by Joseph Alfe on
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Agreed 100% Title companies are the weakest link in the short sale chain. Always make sure thye closer follows closing instructions. Yet another example of why it is so important to have a sellers attorney involved.
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Permalink Reply by Tammy Davis on
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I disagree with you on that Joseph....the title and escrow officer should be one of your strongest links in the transaction. Choosing to work with good, reliable, efficient people in a short sale transaction is what makes some of us extremely successful at closing escrow. Any short sale needs a good "team" working together...a short sale is simply too complicated for one part of the "team" to fail.
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