We in the lending industry take most things fairly literally. I'm not sure if it's a personality quirk we all seem to share or just years of rigorous training. Whether it's our clever acronyms, our job titles or our myriad of forms and ever changing regulations, we tend to view the world from a particular angle that's increasingly becoming more and more black and white. Some of you reading this will likely require surgery from nodding your heads so violently.
Throughout my almost 17 years of marriage, I've either been the recipient (often) or the contributor (rarely) of what my wife would call "learning moments." Learning moments tend to be valuable lessons that I am typically ill-equipped to learn either because of timing, stubbornness, stupidity or some combination of the three. As in our marriage, learning moments in my career are not always pain free but they are always valuable. They often cost money as well - but more on that later.
Recently, my assistant and I had one of those "learning moments" on a transaction. Luckily for us, the transaction closed on time - the day before our closing date. I'm going to repeat that last sentence for added emphasis (and drama - if you're into that kind of thing). Our transaction closed on time because it closed the day before the closing date as specified in the purchase contract.
What we came to find out in this transaction is that in the case of a short sale, lien holders (Banks) are not set up to operate in a logical and efficient manner. This may not come as a surprise to agents, but to those of us that tend to be literal about things, the behavior of our lien holder cousins has been quite an eye opener. Some Banks require a title company to contact them 24 hours prior to the closing date for permission to complete the transaction. Other Banks require 72 hours. In our particular transaction, our funding date was April 30th but the transaction had to fund by the 29th since the Bank required 24 hour notification to complete the transaction.
So here is my request to all of you Realtors out there that are dealing with short sales:
First, make sure that your Loan Officer gets a copy of the Bank's offer for the transaction. It's frustrating to all of us to see a purchase agreement agreed upon by the Seller and Buyer only to have the Bank turn around and produce an entirely new document once they have accepted the offer. Banks tend to have a nasty habit of decreasing seller concessions, changing closing dates etc. In our transaction, the Bank decreased the seller concessions by $1800. This is where the lesson ultimately cost me money.
Second, if you know that a transaction needs to fund 24 to 72 hours prior to the closing date, please let your Loan Officer know right away! If you're not sure, call the Bank ahead of time. Or, check with the Escrow Officer - they are normally a great source of information about how to work with a particular lien holder. As Loan Officers, we tend to see a funding date and have that be the end of the discussion.
I hope by writing this blog that I have helped a few of you avoid a painful learning moment of your own. True, some of us in the industry only learn by the actual experience of going through traumatic experiences. But, just as I am still learning to be a better spouse after 17 years of marriage, I'm still doing the same thing after 19 years in the industry as a Loan Officer. And as the beginning of a new month approaches, I am better armed with knowledge and experience gained in the previous month. May it be so for you as well.
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