What a week this has been with two closings that were on a very slippery, perilous slope to doom. Let me begin with I'm a fairly new agent, six months into my new career. HOWEVER or as a good friend says HOWEVAH - I'm not a total newb. I've closed as many transactions in my six month career as seasoned agents in my market. Somehow, I've managed to have two deals in two weeks that other agents were saying "Wow, I've never heard of that happening before" Great...I want to be unique in the market but that isn't the way I envision!
CASE ONE - a short sale that took 5 months to get approval. We finally make it to closing. My buyer signed the loan docs...the seller signed their docs in another state. The buyers lender wired funds to title. This means we're about done - right? RIGHT? Wrong.
Title has been trying to get final HUD approval from the short sale lender for SEVEN DAYS. According to the short sale closing instructions, title is to send the HUD to the bank 48 to 72 hours prior to closing for authorization. We did this. And waited...and waited...and still we waited. Email after email, phone call after phone call to the asset manager garner no response. The listing agent, two title officers, the loan officer and two of her supervisors and I are emailing each other frantically. What are we going to do? We need approval to record! The buyers lender is ready to recall the wire. And to compound the problem - the loan lock is about to expire. We'll have to start again. What do we do??
I got the contact information for someone high up in the short sale bank's food chain from another agent that heard her speak at a seminar on short sales. So we sent a "PLEASE HELP" email. Guess what? In two hours, we had approval! YEAH!!! We're done - right? RIGHT? Wrong.
The interest charges on the HUD are now incorrect, based on recording four days prior. Title wants to send the revised HUD back to the short sale bank for reauthorization and charge the BUYER the interest. Ah no. My buyer performed - you are not charging him. At the same time - DON'T change the net to the SS bank or who knows when they'll get that approved. You know where this is going don't you? If you guessed the only lines we could adjust - the commissions...you get a cookie. But it's closed, recorded and everyone is HAPPY! We have no idea why the SS bank was not responding to title to approve the HUD. I can only hope someone was deathly ill and not on vacation and forgot...
CASE TWO - a lender owned property. My buyer found a lovely home, in a lovely neighborhood. Thanks to her awesome REALTOR, she got a great deal - the house appraised at $120K on a $112K accepted offer. This is great news - right? RIGHT? Wrong.
Her lender required a SECOND appraisal the week we were scheduled to close to substantiate the value! This is extension number one. Guess what value the appraisal review came up with? $120K. Yup. The first appraisal was spot on. OK, problem solved. We can proceed to close - right? RIGHT? Wrong.
Underwriting came up with a second social security number for the buyer. Instant red flag and deal killer. Bear in mind, my buyer is a FEDERAL law enforcement officer. The background search on her is much more detailed than any banks underwriting review. So now we need to order IRS copies of tax records. A week later and a second extension they decide she is who she says she is. OK, problem solved. We can proceed to close - right? RIGHT?? Wrong.
I have told both her lender and title she will be out of town on assignment beginning on Friday. She must sign docs no later than Thursday - she leaves for 7 days on Friday and can not be accessed. No docs...no docs...WHERE ARE THE DOCS - it's THURSDAY!!! At almost 3pm, title finally gets the docs from the lender. OK, print them and we'll get a mobile notary tonight and she can sign. EXCEPT...(and you knew there would be one) - her lender bank requires a final review of the HUD. OK, no problem - if something is wrong, she can re-sign that doc when she gets back and we're ready to close - right? RIGHT? Wrong.
The lender noticed an invoice for a home inspection to be paid out of escrow. MY fault - I should have had my buyer pay outside of escrow. I figured she already paid for two appraisals, put this on escrow. I now know - NEVER DO THAT. Now her lender wants to see the home inspection . And not only see it - they want EVERY item the inspector noted on the summary repaired PRIOR TO CLOSING.
Ummmm HELLO. This is a lender owned AS-IS sale. Did you miss those addendum in the contract? We are well beyond the inspection period and the BINSR was accepted as OK. Besides that, nothing that affects the value or safety of the occupants was found in the inspection. The inspector noted missing door stops, missing shower head, missing AC filters, a small air leak in an AC duct and two (yes only TWO) roof tiles that need to be renailed. Total cost of repairs, maybe $200??? The lender refuses to fund unless the repairs are done. The seller will not make the repairs and the buyer can not LEGALLY make the repairs as she does not own the property. The seller addendum strictly forbid any repairs prior to possession.
I send an imploring email to have this reviewed. I stated that neither appraisal indicated repairs needed. The value of the asset is more than the loan - imagine that, an equity position in todays market. And a home inspection was never a condition of the loan. If my buyer had paid the inspection fee outside of escrow - the lender would have funded and not asked any questions. The house would have been in the very same condition with the very same issues if they were "ignorant" of the inspection. Why condition the loan now with a condition we can not legally provide? I closed the email with "Would you allow a buyer to make repairs to one of your banks assets prior to possession?" I await the responses on Monday.
So how was your week? Please share your closing nightmares so I don't feel so singled out.
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