I am a buyer on a Seterus short sale.. Seterus countered my original offer, and I accepted.  I've waited a week for the approval letter only to now be told that Seterus is requiring me to put an additioanl non-refundable deposit of $2,000 down to "guarantee" my closing.. This is on top of my earnest money. The deposit will be reflected on the HUD in the net sales price decrease. Everyone seems to be confused in this request (including the sellers agent!) What is the banks purpose in requiring this $2,000 downpayment when they are going to receive their total money regardless at closing?! Has anyone ever had this happen to them?  There is no PMI, and the bank is already meeting their bottom line... The bank is just wanting the deposit to "guarantee a closing".  I will glady increase my earnest money, but to provide a "non-refundable" deposit on a short-sale just seems absurd, especially when anything can happen with the appraisal/inspection... Any advice would be appreciated.

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The reality is that the lender has zero control over your deposit. They cannot claim it as they are not a party to the contract. I would just place the deposit contingent on short sale approval and satisfactory inspections. then juts have the listing agent send confirmation that it has been placed.

Unless the bank requires your signature on something stating the deposit is non-refundable to them as per the contract there is not much they can do. As an escrow agent though if there is an addendum to the contract that is signed by all parties stating that 2k of the deposit is non-refundable and payable to the bank in the event the contract is cancelled we would have to pay it. I close a lot of deals with Seterus though and have never seen this. I would push to a supervisor and get it waived.

Thanks for the advice, guys.!  Teresa, that would make sense on a multiple offer property; however, this property has been on the market since July and I have been the only person interested in the property and only my contract has been received by the bank.  Apparently the sale is being negotiated by a title company and they, along with my agent and the sellers agent are contacting Seterus to try to stop this non-sense... It makes absolutely no sense.. The foreclosure date on this property is March 22 and I've had a verbal approval since February 4th.  If anything the lender is preventing this property from reaching the closing table by trying to get this non-refundable deposit on top of my earnest money. I've told them give me something in writing yet nothing has been produced. Its frustruating!

Last time I checked, that is what earnest money is for. If they don't want the seller to walk, issue the approval letters and get locked into a binding contract!  I'm not sure any sane person would place a non-refundable deposit on a short sale when absolutely no approval letter has been issued.

The Contract should be binding at the time Buyer and Seller come to an Agreement, subject to Lender Approval.  All the Short Sale Approval would do is remove that particular Contingency.

Like Teresa said, it is to show you are serious. B) It will be refunded to you if the sale did not close. C) There is most likely a scheduled foreclosure sale very soon and this step is being taken to show intent to secure its postponement. D) Some realtors, none here of course!, have buyers who aren't very serious.

Even with an earnest money deposit.The deposits being sought for fc sale postpones would be refundable but often are larger deposits and often must be shown to be in title co's escrow by the title co. (Sort of a proof of deposit for the servicer to see,)

The bank has probably experienced many that did not close due to buyer preformance and this is a way for them to ensure it closes.

 

Cash sales are never questioned if there is verification of funds and 1% earnest money.

Sounds like you are confusing the investor with the servicing company.  The investor is probably fine with the NET, but the servicing company is trying to get more money from you, and I would bet the investor is not aware of this ploy.

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