Replies to This Discussion

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on December 21, 2010 at 3:53pm

Kathleen,

 

To answer the question, YES....  but you also said;  "Now, he wants a loan approval from the private Lender, as well as the source of the lender's funds, and that the head of the lender sign an arm's length affidavit as well as detail as to the ownership of the Lender.  This Lender is not signing any documentation, not providing financial or ownership records either."

 

ASC is attempting to settle a debt - as a result, they need to perform all due diligence to assure that the buyer is truly an arm's length transaction and that they are getting every penny they can to recover as much of the debt as they can.  They also want to make sure the Buyer is not going to Flip the property.  Obviously ASC feels something is awry and they want proof that it's not.  If the lender won't provide what ASC is looking for, there's a reason.....  As a friend of mine always says... "if it walks like a duck......"

 

Unless someone can absolutely prove there is NO connection between the buyer, the seller, the lender, the agents, the broker and the settlement company in any way shape or form - this deal is NOT closing.  Also, keep an eye out, there may be a restriction placed on Title that the property cannot be transferred for "n" days.  (typically 90 - 120 - 180 days).

 

Best of Luck,

 

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Kathleen A. Scanlon, JD on December 21, 2010 at 4:45pm

I have never seen this requirement for the Lender.  I checked the documents, there is no restriction on any transfer (not that I think that would be enforceable as there is a lack of privity) and the necessary parties (buyer/seller/agent) executed the arm's length affidavit.  This is not a HAFA short sale.

 

The buyer is a corporation which intends to resell the property and that intention was disclosed in the contract.

 

Does anyone have someone in management?

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on December 21, 2010 at 5:18pm

Sounds like ASC is trying to determine if the the Buyer and the Lender have a business relationship other than "Lender/Borrower" which could be collusion to get the property at a price that's too low.  If the "Buyer" is willing to absorb so much of the Seller's costs, & liens, at what point should they have paid more (or less) for the property.  It still smells bad to me.

 

Thom Colby

Broker

Newport Beach CA

Kathleen A. Scanlon, JD said:

 

I have never seen this requirement for the Lender.  I checked the documents, there is no restriction on any transfer (not that I think that would be enforceable as there is a lack of privity) and the necessary parties (buyer/seller/agent) executed the arm's length affidavit.  This is not a HAFA short sale.

 

The buyer is a corporation which intends to resell the property and that intention was disclosed in the contract.

 

Does anyone have someone in management?

 

Permalink Reply by Kathleen A. Scanlon, JD on December 22, 2010 at 12:59am

I could understand that if it was raised at the time of short sale approval but at this stage of the game...

 

Purchaser and Lender are not even located in the same state.  As far as getting the property "too low", I don't buy that.  Lender conducted an independent appraisal of the property - they know exactly what the FMV is and they make a business decision as to whether or not to accept an offer.  Nobody is pulling the wool over anyone's eyes.  Could the bank get more? I doubt it. They would have to foreclose, pay the foreclosure attorneys, eat the liens and sell as an REO. 

 

This is a 4 family dwelling in the East NY section of Brooklyn, riddled with municipal violations and liens.  It is not your average 1 family dwelling on Main Street in the nice part of town.

 

Interestingly enough, I pulled the Chain of Assignments and lo and behold, I have an Assignment from MERS involving a Fremont Home Loan Series 2006-3 Trust.  I located the PSA and the Assignment is in violation of the terms of the PSA: 1) Assignment made after the cut-off date and 2) made while loan was in default. Further, it was executed by someone by the name of Elpiniki M. Bechakas, who works for the foreclosing attorney.  NY Courts are already having a field day with Ms. Bechakas and Steven J. Baum's office.

Perhaps twisting their arm will have some effect.

Thom Colby said:

Sounds like ASC is trying to determine if the the Buyer and the Lender have a business relationship other than "Lender/Borrower" which could be collusion to get the property at a price that's too low.  If the "Buyer" is willing to absorb so much of the Seller's costs, & liens, at what point should they have paid more (or less) for the property.  It still smells bad to me.

 

Thom Colby

Broker

Newport Beach CA

Kathleen A. Scanlon, JD said:

 

I have never seen this requirement for the Lender.  I checked the documents, there is no restriction on any transfer (not that I think that would be enforceable as there is a lack of privity) and the necessary parties (buyer/seller/agent) executed the arm's length affidavit.  This is not a HAFA short sale.

 

The buyer is a corporation which intends to resell the property and that intention was disclosed in the contract.

 

Does anyone have someone in management?

 

Permalink Reply by Kathleen A. Scanlon, JD on December 22, 2010 at 1:53pm

As an update - we are almost there...got a new closing specialist on the file and he apparently knows what he is doing. We are past the funds issue and now just tweaking the HUD-1.  I don't necessarily agree with him but we all have to make concessions.  In the end, the numbers work out pretty much the same for both parties.

 

But, I will note that I will make sure no closing is even scheduled until I have an approved final HUD when dealing with Wells Fargo/ASC.  

Permalink Reply by Smitty on January 15, 2011 at 11:10am

Kathleen,

 

You did awesome.  I'm bookmarking this thread.  I would have had no clue how to handle something like that.  My only thought would  have been to draft up an affidavit for the buyer and lender to state their relationship is strictly business and have both sign.  I also add private money fees under "loan origination" on my HUDS, as whatever points the private lender charges the buyer has to pay one way or another.

It seems to me this negotiator put you through the ringer though.  I've never heard of such a request and I have worked with "flippers" -  ASC is not my favorite lender to work with, although they aren't the worst either.  It's interesting though that each negotiator seems to have a different requirement.  Wouldn't it be nice if they all had the same requirements....LOL.

 

Good job.