I am representing a buyer on a short sale in San Diego where ING has the 1st, and B of A has the 2nd. 

Based on the repairs required (roof, sewer, electrical & plumbing - about $20K total), my clients made their offer about $35K under fair market value last October.  ING came back after about 90 days, and asked for a $15K increase, and wanted B of A to accept $3300 on their $58K HELOC.  My client and B of A agreed, and I thought we would be opening escrow within days...... NOT!  A month later, ING has now come back again and demanded:

• Seller to contribute $5,000.
• Buyer to pay $4900 in delinquent property taxes.
• They will NOT pay owner's title insurance (typically seller expense in this area).
• Will not pay $1500 termite repairs, or $100 zone disclosure.
• This must close by 4/15/2011 or buyer to pay $150/day penalty!

The seller has already lost her credit score, and all the money she put into this house (very nice upgrades) and last month she moved home to Australia.  My guess is that she is going to tell ING to "pound sand" with their $5K request.  I feel like recommending that my buyers walk away from it. 

ING has not yet filed a "notice of default" which is the first step in the foreclosure process in CA.  If they choose to foreclose, it will take a minimum of 120 days!

I can't understand how they can be so short sighted about this.  The house is currently empty, and if it goes another 120 days before they get it, there could be some serious deterioration, as well as decline in the value! 

Does anyone have experience standing up to their demands and having them back down?