Every few days I get stories from the Curry Boy's in Florida and others about Short Sales......we all have tales to tell so here is another.
I am so sick of the incompetence and arrogance of people in the banking industry. It seems like the incompetence never ends.
We have a short sale closing this week. The underwriter for the buyer's lender demanded a change to the short sale approval letter. The short sale approval letter for the first said they would release the lien after they were paid. The payoff amount factored in paying of the 2nd mortgage. But, it didn't state exactly what was to be paid to the 2nd.
So, the underwriter said they wouldn't approve the loan until the short sale approval letter was changed. We called up the short sale lender. They said they wouldn't make the change. The buyer's lender said the deal was dead. The problem is that how the short sale approval was written makes no difference to them.
That's why you order title insurance! Most title companies have millions of dollars in reserves to solve title problems. The title policy states and guarantees the title, no matter what the short sale approval letter says. Apparently this underwriter thought their job duties required them to do the title company's job.
We finally called the CEO of the buyer's lender in California. We told them they were out of line. Why can't we just start making unrealistic demands. What if we demanded, "We want to make sure all funds brought by the buyer to closing have never been laundered or used in the drug trade. We also want the money to be backed by gold." Come on, we all know it's a fiat currency!
I almost thought of putting the following into the MLS private remarks for all our short sales. "Please withhold buyer offers from XYZ Loans, as they do not understand short sales and refused to approve a loan for an approved short sale." I am forced to deal with incompetence and power trips on the short sale end of transactions. I sure am not going to put up with it when I'm the customer.