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.
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Nationstar is not here to help you or anyone else but themselves. They have no decency and, worse, no common sense. They rely on intimidation and the misstatement of facts to fool people. Please read ANY Pooling and Servicing Agreement and you will see that the name of the game for Nationstar is FEES, EXPENSES and just more money. Not surprised at all about Nationstar.
I got word this afternoon that this deal has resolved--legal fees have been waived. Apparently, according to our closing attorney, the substitute trustee/attorney for the lender was not the source of the fees, it was Nationstar ANTICIPATING that there would be fees. Such BS!!
This is a title/escrow issue. As a previous escrow officer for many years...it is the responsiblity of the escrow agent to confirm payoff and adhere to the payoff demand letter. They are the ones who will be on the hook under the terms of the title policy that they have issued to the buyer and their new lender...if the previous lender does not release the debt from the property.
Don't stress....not your issue....from what you have explained.
we lived up to the conditions of the approval letters of the two shorted lenders, since when do we need an approval to payoff a mortgage in full?
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.
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.
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.
Tammy I agree 100% with you. Perhaps I should clarify: Title companies are extremely important, and many fall short. In my experience, the large corporate title companies have rigid policies in place, and tend to like to play underwriter. For example, I had a short sale approval letter that had NO deed restriction. Stewart closer decided to make one of her own...and killed my deal. Many times, last minute number changes make shuffling numbers around the HUD inevitable. Sometimes items need to be moved to the buyers side, or whatever. If the closer isn't flexible, it could endanger the closing. Lastly, title closers are notorious for not following short sale aclosing instructions, thereby threatening to have the lender reverse the wire.
I have found that smaller, "boutique" title companies have a much better ability to work with us to make sure the deal closes. I have three in the Chicago are that we exclusively use, and I am finding them around the country. Title is critical, make sure you are working with one you trust. I go so far as to visit with them and help train their closers on what is expected of them in a short sale. For the record, in Chicago, Greater Metropolitan, PNTN, and Baird & Warner are excellent. In the mid-East, Meridian Title and Laurus are top notch. Florida has Suncoast.
www.ssprocessors.com
And full -disclosure, your license is with Baird and Warner, correct ?
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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