Short sale lender approving HUD-1 Settlement Statement

Just a little background first. We put an offer on a short sale Dec 2010, the lender (BOA) counteroffered us on April 5th for 10k higher and we accepted that day. We did not get the "final/written approval" until June 3rd. Needless to say we've been waiting a while, but I think we are going to wait more now. Apparently BOA needs to see the HUD-1 (settlement statement) from the closing attorney before we can close. When I worked in the industry I knew that the lender actually lending the money needs to see the HUD-1 before closing, but was unaware that the short sale lender needed to see it as well. So even though we are clear to close and everyone is ready to go, we may have to wait even longer for BOA to approve the dang HUD-1.

In your experience does BOA take days to approve the HUD-1 or can they turn it around in a few hours. The closing is scheduled for tonight but I'm feeling like that is not going to happen.

Thanks for any input.

Josh

Great subject!

Hello my friend: LISTEN TO THIS:

1.- Lets make clear that in transactions like this we deal with 2 HUDs: 1 HUD from the buyer (which shortselling lender does not care,( unless is wells fargo and they want to make sure they do not over pay 1 more penny to buyer for cc in the event cc is granted) and another HUD for the seller (which is the one they want to see showing how much shortselling lender is getting, commissions, pro-rations, etc). Those are the two HUDS. In the short sale world we talk about the second one, the sellers HUD.

2.-So lets go to the point:

Every single time you are going to close a short sale,(unless not required by short selling lender : rare) despite having a short sale approval in writing with closing date and amounts; the short selling lender ALWAYS requires to see a FINal HUD from escrow, just to make sure, all approved terms, remain the same, and are in compliance with the original guidelines provided in the approval.

Many tings may chance: pro-rated tax days, tax penalties, fees, etcc... Sometimes, the lender gets more money or sometimes, "smarty pants" agents will try to put fees not originally approved, just because they have "enough room", so that is why lender required FINAL HUD approval before closing.

In my experience, as soon as buyer loan docs are ready, I request escrow to provide me a final HUd with closing date to match the day of closing and I submitt inmediately to the shortselling lender for approval, so closing takes place in time and with no delays.

In othes instances, the tax pro-rations excceed the calculations, and most lenders -base in my experience- will be willing to receive more less money if the diffence is not to big (couple of hundreds) but each case is different.

So now you know, every time a short sale is going to close, at least 3 days prior we must have a HUD approval.

Replies

Enrique Vasquez-Plaza June 6, 2011 at 11:26am

Jeff got it right!. Let me know if you need extra help on that part, you are just right there and it will make me sick to know you guys will loose that deal... I am here to help, I've been there before!
Enrique Vasquez-Plaza June 6, 2011 at 11:23am

Great subject!

Hello my friend: LISTEN TO THIS:

1.- Lets make clear that in transactions like this we deal with 2 HUDs: 1 HUD from the buyer (which shortselling lender does not care,( unless is wells fargo and they want to make sure they do not over pay 1 more penny to buyer for cc in the event cc is granted) and another HUD for the seller (which is the one they want to see showing how much shortselling lender is getting, commissions, pro-rations, etc). Those are the two HUDS. In the short sale world we talk about the second one, the sellers HUD.

2.-So lets go to the point:

Every single time you are going to close a short sale,(unless not required by short selling lender : rare) despite having a short sale approval in writing with closing date and amounts; the short selling lender ALWAYS requires to see a FINal HUD from escrow, just to make sure, all approved terms, remain the same, and are in compliance with the original guidelines provided in the approval.

Many tings may chance: pro-rated tax days, tax penalties, fees, etcc... Sometimes, the lender gets more money or sometimes, "smarty pants" agents will try to put fees not originally approved, just because they have "enough room", so that is why lender required FINAL HUD approval before closing.

In my experience, as soon as buyer loan docs are ready, I request escrow to provide me a final HUd with closing date to match the day of closing and I submitt inmediately to the shortselling lender for approval, so closing takes place in time and with no delays.

In othes instances, the tax pro-rations excceed the calculations, and most lenders -base in my experience- will be willing to receive more less money if the diffence is not to big (couple of hundreds) but each case is different.

So now you know, every time a short sale is going to close, at least 3 days prior we must have a HUD approval.
Jeff Payne June 6, 2011 at 8:07am

They need the HUD-1 3 days before closing. Probably just need one or two days, never had them ignore us at this point. HUD gets uploaded online and the numbers have to match the approval

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