Chase investor reduces seller closing costs on the day of closing...

Hi All,

 

Has anyone had Chase reduce the closing costs last minute..We had approval over a month ago and $5k in closing costs were approved by Chase. We were set to close Jan 4th and Chase called to say we had to reduce the closing costs to $1539.29...

Of course try explaining this to a buyer and buyers agent that we had $5k approved and now 4 hrs prior to closing the HUD 1 has to be revised to reflect $1539.29...

It was tough.. I tried to escalate this in such short time but our closing coordinator stated that this would be a waste of time as it was an investor decision..

In the end to cut a long story short the buyer had to come up with an additional $2k and both agent chipped in $750.00 each.

We got this file closed which of course is the ultimate thing to do but I had a sour taste in mouth as our prior HUD 1 had full approval with us hitting the required net..

 

Thanks,

Julian

 

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Replies to This Discussion

I have seen a number of cases where this has happened.  The lender/investor will be willing to cover legit closing costs and not allow what they see as "padded" costs.  So often they will have approved closing costs and only allow those to be paid.

 

Steele in MInnesota

Thanks for all responses...Short sales are so unpredictable and having closed so many it was just a shock that the investor decided to change the terms of the contract that was approved by Chase 4 hrs prior to closing it put everyone's back to the wall..

It happens. Happy it was sorted and closed.

I just gave you info to one of members, Nedy Blanchard, for a referral in Durham. Here's her info if you want to reach out to her. She's an agent   http://www.floridadigs.com/

Thanks Bryan!

I will reach out to Nedy right now...

Hi Patricia,

The purchase price was $189k the closing costs approved were $5k we supplied a HUD 1 as a net sheet. The seller received a $1k seller incentive. A GFE was not requested and our closing coordinator gave us an ultimatum take it or leave it.  ( It was an investor decision) Seller just moved out buyer had the moving truck loaded we just had to act quickly we tried to reduce the purchase price to reflect the loss to the buyers but we not permitted to do this. I even requested the seller incentive to be moved over to the buyer they said this would not be allowed. In the end the buyer came up $2k and both listing firm and buying firm chipped in $750.00 to make it work.

On a positive note the negotiator was able to approve the HUD 1 in time for us to close with out delay...

I would suggest that you did not have "full approval" but I could be wrong. Full approval would be where Chase has sent you and your seller a letter that states the terms of acceptance which is in effect a contract between the seller and lien holder. When the negotiator approves the HUD and indicates that it should be approved in the next 5 to 10 days, that is really only the negotiators opinion based on the servicing agreement that they have on their computer screens. I have had many short sales where there were changes in the approval letter from the final HUD that was submitted to the negotiator and was previously deemed OK by the negotiator. I have never had an agreement letter between the seller and lien holder change, providing the terms of the letter (date to close) were met. Anything can happen in a short sale, but I would caution indicating a full approval based on the negotiator opinion.  

Mike we had full approval which stated all terms and required net for Chase...

The investor basically overided the contract and approval letter we had and there was not a thing we could do other than not move forward with closing...

I had this happen on one of my first short sales where I was representing the buyer - it was with Ocwen.  The listing agent and I chipped in to cover the short fall but from then on I have never asked for credits.  Our market is so competetive that you need a strong offer.  As a listing agent, I don't take offers asking for a closing  credit - it just causes too many problems with appraisal issues and the last minute refusal of the banks to pay such as you had.  Again, we usually receive several offers on a property so listing agents can really choose the one most likely to close escrow with the fewest issues. 

I've never had this happen and to be honest am a bit surprised so many have encountered it.  Did you have to have a final HUd approval somewhere between 48-72 hrs before closing? Did it get approved?  I'm assuming that's where things got held up, but there is part of me that feels, so long as you met the terms of the approval, how the heck could they not approve the HUD1?  We've had to chip in for condo dues etc., and things we miscalculated, but $5000 is a LOT to miscalcluate. 

Hi Smitty,

We even over estimated taxes so Chase had an additional $2k that was added to their required net. It was an investor decision last minute. Basically our closing coordinator said the investor would only cover certain buyer line items on the HUD..I too have never had this happen..

So, I want to make sure I understand this.  You're approval letter stated that the buyer could have $5000 in CC and your HUD1 was generated to reflect that, and then when you sent it in for approval, they said NO?

Yes it did...

We had a full breakdown of all figures that Chase had agreed to with a required net amount we had to keep..

Our original HUD 1 matched the approval letter...

When we sent the final HUD 1 for for approval 72 hrs prior to close with the exact same numbers that were originally approved the investor changed the closing costs from $5k to $1529.29 they did this 4 hrs prior to closing..

 

 

 

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