Is buyer entitled to copy of approval from Fannie Mae
Hello all and happy Holidays.
Is the buyer entitled to see a copy of Fannie Mae approval letter?? I feel like before going forward with home inspection and such that a copy of the approval should be provided.
My daughter is involved in purchasing a short sale in Green Bay, WI . Offer submitted at $140,000.00 and offer was accepted in May.
Loan package was submitted (finally) to Fannie Mae in November and it was rejected with Fannie Mae saying they wanted $170,000.00 for the home and my daughter does not come close to being qualified to purchasing at that price.
Realtors told my daughter it was simply a formality to resubmit at $140,000.00 and Fannie would approve. Paper work was updated (amendement to offer extending closing date, etc.) and Fannie rejected again at beginning of December saying they want $170,000.00.
My daughter asked for her earnest money back and several days later the realtor contacted her saying Fannie had approved sale at $140,000.00. The realtor wrote another amendment extending closing to 12/31/2012 and instructed my daughter to order home inspection which my daughter must pay for ($300.00 cost).
My daughter has asked several times to see the Fannie Mae approval letter as has her lender and the realtor keeps putting both of them off. My daughter is only trying to be sure she does not incur an unneccesary inspection fee.
In addition sellers of the home have now had to vacate due to foreclosure and home was winterized which Realtor just told my daughter on 12/14. And my daughter was told by realtor that she must pay to have home de winterized which must be done before inspection.
Thanks in advance for any advice
Replies to This Discussion
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Permalink Reply by Jeff Johnson on
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Hello all:
I want to thank each of you for your advice and help. My daughter received a copy of the approval yesterday after standing her ground, she is not paying for de winterizing the home which will be done early next week so the inspection can be done.
Once again thanks to everyone and I wish all of you the best during the upcoming holidays.
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Permalink Reply by Jim Celer on
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Good to hear. Amazing that they came down on price. My first deal died over $500. Marketed for $14,000(metro Detroit). Signed purchase agreement for $14,500. FHA/Wells appraisal came back at $20,000 and they wouldn't budge. Buyer came up to $19,500 and then walked.
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Permalink Reply by Marti Sauers on
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That's great news Jeff! I hope things go smoothly from here on out, but short sales require patience, and as your daughter found out, a bit of persistence. Be prepared for a few more bumps in the road (maybe they'll come, maybe not), but keep the big picture in mind. It sounds as if she is getting the home at a value.
I always advise my short sale clients to view this as a 'transaction' rather than a home until they have the keys in hand. Keep the emotion at a minimum and eat the elephant one bite at a time. This will help you navigate through the process with as little stress as possible. With a counter offer of $170 and a purchase price of $140, try not to sweat the small stuff -- and when considering that she could be moving into her new home with immediate equity -- most of the issues will be small stuff.
All the best to you and yours!
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Permalink Reply by Katherine "Kat" Breig on
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Hi
1.) What state is this transaction? In CA our CAR form SSA Item 1C. has verbiage that the buyer is entitled to a copy of the lenders consent/forms . The buyer has the RIGHT to see it in writing, which ALL buyers SHOULD. Buyer has the right to make an informed decision as to whether or not to continue on with this SS.
2.) Sounds like this is an REO sale not a SS. Please verify. Maybe the Bank is getting READY to foreclosure but has not yet and sellers have moved out.
3.) Does not appear either agent is doing their fiduciary duty by what information is being relayed on this site.
4.) Get the facts and have your daughter as "a better question" she does have contingencies rights as part of the contract.
5.) Buyers have rights too!
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Agents that say no crack me up. If I was a buyer and there was an approval that myself or my agent was not permitted to see I would walk. It is very rare that we sell other peoples short sales but in the case I do and the other agent does not want to share the letter than I assume there is something to hide.
Below is from our short sale addendum to purchase and sale contract, Note the word to BUYER in bold.
If
Seller does not deliver written notice to Buyer that Lender has approved the purchase price and contract
terms within _________ days from Effective Date ("Approval Deadline") (30 days if left blank), or if Lender rejects this Contract prior to
the expiration of the Approval Deadline, either party may thereafter cancel the Contract by delivering written notice to the other.
However, such right to cancel shall cease to exist if Seller delivered written notice that the Contract has been approved by the lender"
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Permalink Reply by joe beauchamp on
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So, your position is that if a listing agent doesn't hand the buyer the seller's private financial information with the bank, there must be fraud. And your reference for this is not a sentence that the buyer must see the approval but that the buyer must have written notice that the sale had been approved. I'm glad you don't work for the IRS.
You can read in this forum about a buyer who didn't like the seller getting HAFA moving money and wanted it for himself. Good luck with your position if you are the agent who created that problem w/o getting permission from the seller to give his personal financial info to the buyer, eh?
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Show me a short sale approval letter that has seller private financial info on it ? This has been covered here before. It has a account number, an address and specific terms to the short sale. I have never in my life seen secret seller only info on a short sale approval. I never met a buyer that cared about a seller getting a HAFA incentive. I am not nor have I ever been an agent that created a problem for any of my sellers. Im glad I dont work for the IRS either or with you for that matter.
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Permalink Reply by Jim McCormack on
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I think you are misinterpreting the wording of the Short Sale Addendum that you pasted onto this site. It says (per the words you pasted) "If Seller does not deliver written notice to Buyer that Lender has approved the purchase price and contract terms within _________ days from Effective Date...."
The key words are "written notice". That can be an email, fax, or letter stating that the short sale was approved. It does not say that the Seller has to provide the short sale approval letter at all. Interpreting it that way is simply incorrect. If the listing agent emails the buyer agent that the lender approved the short sale and then it turns out they were wrong and the sale cannot be closed and the buyer incurred costs and damages as a result of this then the listing agent is liable for damages and can be sued.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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So, are you an Agent, Broker, Attorney? Do you work Sellers, Buyers or double-end?
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Permalink Reply by Tammy Davis on
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I always send the short sale approval letter to the sellers, buyers agent, buyers lender and title company. All parties need to know the conditions of the approval letter, especially the closing date.
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Permalink Reply by Kelly W. Maynard on
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I think the key here is, "Written Notice". The Buyer must be notified with "Written Notice" that the Seller has agreed with whatever is written in the Approval Letter from the servicer, and that they are proceeding to close, on whatever date is in the Approval Letter. The Buyer is not obligated to "see" the Approval Letter. The Seller is not obligated to give the Buyer a copy of the Approval Letter. The Approval Letter is between the Seller and the Servicer/Investor. If there are items in the Approval Letter that must be met by the Buyer, those would have been asked of the Buyer, by the Seller, through their agents, and negotiated prior to the Approval Letter being written and given to the Seller.
"Written Notice" may be in the form of an email. It could be on a piece of paper, hand written. Or, maybe, like in the state of Arizona, your state association will have a form such as an "Agreement Notice", that is to be used to notify the Buyer that an Approval Letter has been received and the Seller agrees to the short sale terms and will proceed to close.
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My reply above is to William F Griffin Jr.'s remark above.
As for the original question, I would like to say. Yes, get a copy of the Approval Letter. Before your daughter spends any money, I would say in this case, that it would be wise to do so. If the listing agent will not let you have a copy then I would have your agent contact the listing agent's broker. Explain the situation. At least have them put into writing what the Approval Letter says and have the Seller sign. The Seller will have to provide Title with a copy, so worse case scenario ask the escrow officer to give you a copy.
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