Selling agent will not release lienholder approval letter citing legal matters with personal info on it
The selling agent will not provide to my lender (I'm buying a short sale - BECU is my lender) the actual lienholder approval letter. they say the 90SS form is sufficient and that they can not give the letter because it contains private and personal information about the sellers. BECU states that in none of the paperwork is there any proof that the lienholding bank has approved the price that is on the Purchase/Seller Agreement. They're right!
The selling agent (Windermere) finally sent over the letter with sensitive information blocked out. Now BECU is saying they can't accept the letter with info blacked out due to fraud issues. WTH!!?? I'm super frustrated because A) both sides are claiming that this has NEVER been an issue before B) nobody seems to know what the solution is C) the lienholder approval exires in less than 20 days!
We have put out an inquiry to another mortgage broker / underwriter (through Wells Fargo) to see if they would accept the lienholder approval paperwork as it sits right now. Depending upon what they say we'll know where the problem lies. Needless to say, even if it another lender will accept the paperwork I don't know if we can get it done in the amount of time we have left and this whole thing has to go back into approval with the liendholder (BOFA by the way and it's an FHA loan).
GRRRRR does ANYBODY have any insight or solutions here???
Replies to This Discussion
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Permalink Reply by Smitty on
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I don't release lien holder approval to agents, but I do release it to the buyer's title co or title attorney with nothing redacted. I've never heard of them redacting an approval for the buyers lender and I would imagine that make the loan uninsurable.
The letter does contain private information, but it is still necessary for the buyer's title co or lender to see it. Something isn't right.
Good luck.
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Permalink Reply by Ghana Bigsby on
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Maybe escrow or title can help. They maybe able to attest to the info within the approval letter without disclosing the deemed "personal" information.
For example in Calif we can use an affidavit from our closer as an alternative of disclosing sellers' tax id# to buyers as required by Internal Revenue Code (“IRC”) Section 1445. > disclosure sample see item #2.
The short sale approval letter is also the lenders' instructions to the closer. The closer needs to see the unmarked approvals.
Another benefit of being able to use an option like this is that title will have known the content of the approval letter when issuing the title policy.
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Permalink Reply by Wayne Brooks on
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What "sensitive" info is being redacted?
SS #; it has to be provided to the closing agent
Loan#; who cares (the whole world knows your loan was in foreclosure).
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Almost all buyer lenders at this point want copies of the 3rd party approvals. They don't want to do all the work to just find out the person handling the short sale did not have approvals on hand. Seems to be a silly reason to hold up a sale, specifically the Final Demand letter that you will get as your approval contains very little "personal" info.
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Permalink Reply by Jeff Payne on
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We have our title company contact the lender, afterall the title company is who needs the condition to be cleared in order to provide clear title. Never have issues
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Have the letter released to the Title Company. I would not release the letter either. It does have personal information and if your lender won't accept the redacted letter, that is foolish on their part. Guaranteed, if they were the short sale lender, they would not release! Good luck!
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What sort of personal highly top secret info is on an approval letter ?
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Permalink Reply by cynthia Down on
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It's actually a HUD statement/approval and it's kind of a form letter. There were 7 boxes blacked out - 3 of which had some personal info (loan #, SS#, etc.) but then they also redacted the Appraisal value and 90% of appraisal value.... hmmm
I went ahead and ordered the appraisal through my lender at risk and the process is continuing on to try to hit the deadline. The selling agent claims that they will release the letter once the lender has "disclosed all of the other requirements" they're going to have (like BECU is being unreasonable...).
Looks like a lot of good advise about releasing to the Title company. I'll let my agent know if there's still some kind of issue.
Thanks for the comments guys!
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