Replies to This Discussion

Permalink Reply by Barry Chadwell on October 30, 2012 at 9:24am

Wendy,

There appears to be a fair amount of finger pointing and, dare I say, cover up going on right now.  Perhaps its just my "conspiracy theory" run amuck.  I too have a deal with Chase/Freddie which I cannot close because neither will provide evidence to the second lien that it is Freddie (does not appear on the Freddie site).  I have tried all avenues, makes no sense that no one will admit in writing.  Point is, I think with all the lawsuits against the lenders that they are just hunkering down and keeping the secrets in house/not making deals with the slightest issues work.

My Broker had a deal that she could not get agreement on.  She let it expire, resubmitted, got a different negotiator, closed the deal. Possibility??

Good luck,

Barry

Permalink Reply by Wendy Brandel on October 31, 2012 at 3:45am

Unfortunately it does seem that the file ended up in the wrong negotiator's hands. But being that there were 2 other negotiators that Approved the short sale it seems logical to me that the bank would have allowed the transaction to close escrow and pursue in-house auditing or review their policies/criteria for short sale. The irony is that by reneging on their Approval they performed an unethical act which falls into the same category of why they wouldn't honor the short sale approval. Now I sound like I'm talking in circles. I guess it's just time to move on but I will definitely consider taking the route to switch negotiators the next time around.

Permalink Reply by Jeff Payne on October 31, 2012 at 3:50am

Wendy, the problem is that there is not logical thinking when dealing with the short sale lenders.  Logic would say that it does not matter who the buyer is as long as it is arms length and the required NET is met.  What unethical act did they perform? that is where you lost me.

Resubmit the offer and get it approved!  

Permalink Reply by Wendy Brandel on October 31, 2012 at 5:12am

The bank's decision to decline the short sale after an Approval was issued seems unethical. Ethics would dictate that bank and all parties abide by the terms of an Approval unless there is a valid reason for not doing so and in this case everyone is bewildered because the seller's financial situation did not change and the bank never made any qualms about the adjusted (appraised) price which also happened to be $3K more than the previous offer that was approved.  Unfortunately the seller and buyer have moved on from this transaction but I'll definitely resubmit if this ever happens again.  Thanks for all the input!!!

Permalink Reply by Jeff Payne on October 31, 2012 at 5:22am

I tend to disagree, the bank has every right to decline any short sale, even when it makes zero financial sense for the bank to do so and no matter how frustrating it is for us.     A short sale is not a right, it is a privilege and the banks have no duty to a seller to approve a short sale.  

I think it is really stupid that the banks can not just assign a new buyer to an approval and move on, but also understand it is their right to make that rule.  

Permalink Reply by Wendy Brandel on October 31, 2012 at 6:18am

I agree that to short sale is an absolute privilege and that the banks are well within their rights to unilaterally turn down short sale offers.  But once an Approval Letter has been issued the bank has now entered into an agreement with the seller to allow the short sale under predetermined conditions. I do not believe that the banks should have the express right to cancel a contract when the terms of the Approval agreement have not been breached/violated.  Otherwise what merit or value does the Approval agreement really hold if the bank can arbitrarily cancel the Approval?..

Also, I agree that the banks should have the capacity to switch buyers without starting the whole process over as long as the Net is met.  Just another area that we have no control over.

Permalink Reply by Wendy Brandel on October 31, 2012 at 3:49am

Good advice!