Pamela Madore
Keller Williams Realty
806290-1920
It is has been a tough week. For me, my buyers the lender, and the title company. Plus the seller and her new roof that was supposed to be taken out of proceeds.
The deal died on closing day. The absolute worst day.
Here is the saga--still ongoing-- of a sad tale when one person is either shady or two people are unclear about how to do things. I prefer the latter.
My buyers found a house that they really loved. We had a pre-approval and no one had any indication that there may be a skeleton in the closet. The pre-approval went great. All the fraud tests were down and we were clean. Or so we thought.
The seller had to put on a new roof because there was enough damage on the old roof to make it uninsurable. She did so with the good intention of paying for the roof out of the proceeds of the house. The roofer expected the same.
The lender began to have a "niggle". You know a thought that didn't make sense. Out of the blue they found a 1098. If you don't know what that means it is an interest statement from a mortgage loan. My buyers already owned a home so it got slightly jumbled but not enough to cause alarm of any kind.
My buyers had a charge-off on their credit report. That in itself wasn't bad. The underwriter in their conditions asked the lender just to verify that it was a "consumer loan" charge off. In due diligence the lender contacted the company and was asked to send a written verification from the buyer that it was OK. The FAX didn't arrive. They sent again. Still nothing. At this point they got the credit reporting agency involved. I mean, how hard can this be?
It turned out to be harder than anyone could ever expected from day 1. Apparently, the charge off was a "consumer loan" but in using my buyer's SS # they found she had an outstanding mortgage in default with the same company. What!?!?!?
Four years earlier, my buyer had a house that they sold to an investor. (The investor later admitted to me that this was his first deal. ) The investor bought the house simply by "taking over payments". On the closing statement that the seller got (my buyers) it said "assumption of loan". The paperwork was done at a local title company and all is well. The investor got the deed and it is in his name in the appraisal district. Right?
Wrong! First of all the mortgage company does not allow "assumptions". You can't just go in and take over payments. The investor had all mail forwarded to his residence so my buyer (then a seller) had no idea anything was amiss. They thought that by going into a title company made everything official. Up until this week they still thought that.
We got on the phone with the mortgage company and this was what happened. The mortgage company was never informed that there was a sale. If they had been notified they have a "due on sale clause" which would call the whole note due. The new buyer (investor) had access to the account and made mortgage payments for TWO YEARS! Then stopped. My buyer (was then a seller) remembers a text from him about a POA (not knowing what that meant) on the day that her mother died. They had no further communication.
I love a mystery and hate a wrong. I spoke to a couple of other local investors and asked if they knew him. They both said that they did but held back from there. It was unspoken words.
My buyer (then seller) had a phone number for him so I tracked him down. Here is a paraphrase of our conversation:
Hi My name is Pam and I am with Keller Williams Realty. Do you own a house at 123 Main St?
Him: Yes I do.
Me: Are you aware that there is a mortgage on the property that you were going to assume/refinance within six months of purchase?
Him: Yes
Me: Are you also aware that there have been no payments made in two years with a past due amount of $7000 and that there are $4500 owed in back taxes?
Him: Well, I tried to get POA from her and then she didn't call back so I didn't know what to do so I just didn't do anything.
Me: Is it rented?
Him? Yes.
Me: How much?
Him: Well the house was in really bad shape so it was only rented for like 9 months.
Me: For how much?
Him: $500
Me: So what have you been doing with the money? $500 times 9 months is $4500. Have you been putting it in your pocket?
Him: Yes
Me: Ok. We can do this the easy way or the hard way. The easy way is that you refinance the loan. The hard way is that we hire attorneys. Which do you prefer?
Him: The easy way. I will call them first thing Monday to get this straightened out. Very sorry. Thanks for your help.
What do you think? My buyers have lost their deposit and they money they spent on a home inspection. What about where they live now? How will that get rectified?
The house is deeded in his name so he owes the $4500 in back taxes. What else do you think he should pay?
This is an ongoing saga with no result established other than the fact that my buyers will not be able to buy a house for at least a year.
The whole thing makes me sad. What do you think? Was my buyer ripped off? What would you do?
That is why you should always hire a professional Realtor like me to protect your
interests. And remember when you, hire me, the seller actually pays the commission!
If you feel as those something is a miss at the very least contact me. You may then need an attorney. So much can be avoided with just proper education.
I am here to help.
Pamela Madore
Keller Williams Realty
3955 S Soncy
Amarillo TX 79199
806-290-1920
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