Special offer

Foreclosure File - You won't sell it to me, WHY???

I am presently representing a 3-time repeat client who is purchasing an REO property, owned by a very large financial institution.  Two things here are important ... the lender that owns the property, and the company that will be writing the loan for the property, are one-in-the-same.

FHA loan, great value for what the property has to offer, and very minor issues as a result of the inspection.  At one point in time the roof had leaked and there was an old water stain.  As a result, this lender is fighting amonst itself that the property it owns, and is slated to lend on, is not in a condition fit to sell.  WHAT?!?  My inspector is as good as they come, and is a mold and air quality expert.  The inspector has emphatically told this lender that there are no environmental issues, in addition to their having the entire inspection, and it is all falling on deaf ears.

Now you would think that IF a lender owned a property, it should:

A.)  Do whatever it deems necessary to see it into a fit condition to sell
B.)  Do whatever it can to see that it can close, ESPECIALLY if they are writing the note on it!

OH, a third and fourth relevant variable ... the individual who did the FHA appraisal, who was previously an FHA underwriter, said there shouldn't be any issues!  The Buyer is fully approved.

I just want to shake some of these banks and the decision-makers at them.  If logic was introduced, things might improve drastically out there!

Any like stories in your business?  Unique situations that defy logic and understanding?

Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News
Right hand meet left hand.  DUH!  Just goes to show how this mess keeps getting crazier and crazier. 
Mar 16, 2008 07:33 AM
Rosario Lewis
DDR Realty - Newburgh, NY
GRI, SRES - DDR Realty - Orange County, NY
Can someone say, "Catch 22"? Or maybe, "Alice Through the Looking Glass". It makes a great story, but it's a true nightmare for your buyer.
Mar 16, 2008 07:38 AM
Derek Bauer's, www.DoorToDreams.com Door to Dreams Home Selling Team
Real Estate One - South Lyon, MI
Cindy -- thanks for stopping by.  You are absolutely right!  It blows my mind how much nonsense is happening.  Have a productive week ... even though the banks will try to keep us down!
Mar 16, 2008 07:39 AM
Derek Bauer's, www.DoorToDreams.com Door to Dreams Home Selling Team
Real Estate One - South Lyon, MI
Rosario - It is a nightmare, and we were told over a month ago to just leave the utilities on in the Buyer's name because, "we would be closing soon..."  I feel horrible for my Buyer and I am going to reimburse for the utility bills that will likely got about 5 weeks past what we anticipated.
Mar 16, 2008 07:42 AM
Steven Fishman
Independence, OH
Sounds like a Coutrywide REO....If it is CW they require a pre-approval only not the loan. Switch lenders ASAP.
Mar 16, 2008 08:00 AM
Derek Bauer's, www.DoorToDreams.com Door to Dreams Home Selling Team
Real Estate One - South Lyon, MI
Steven - :)  Yes, I know CW only requires a pre-approval (wonder how long before that will be everyone's policy), and in this particular situation the Mortgage Broker has been shopping other lenders since we caught wind of this all.  Thanks for commenting ...I appreciate it.
Mar 16, 2008 08:06 AM
Steven Fishman
Independence, OH

Not sure how that is even legal. Don't see many other doing it other that offering a incentive if they use that particular bank.

Mar 16, 2008 08:13 AM
Derek Bauer's, www.DoorToDreams.com Door to Dreams Home Selling Team
Real Estate One - South Lyon, MI

Steven - I believe that RESPA does allow mandating qualification from a particular lender, but they can not mandate who the Buyer actually closes with.  That is my understanding, anyway.

Mar 16, 2008 08:21 AM