West Hills Ca./Woodland Hills/San Fernando Valley Real Estate/Did You Know... On Short Sale Transactions
HERE IS A LIST OF SOME OF THOSE THINGS:
Here is very important to note the expiration dates on demands and payoff instructions. If the expiration date is prior to the COE (Close Of Escrow), a new demand or extension will be necessary. These demands need to be extended for at least two days after funding. This will ensure that the funds can be transferred in time after confirmation. The payoff dept. is unable to issue wires, order cashier's checks or issue company checks until the final HUD is received from escrow. It can often take a day for escrow to be able to balance out the file so the demand extension must provide for this time.
EVERYTHING that is being paid on behalf of the seller or towards the seller's obligations, whether being paid outside of title/escrow or through some other financial arrangement must be properly disclosed to the short-sale lender. The following two examples require disclosure and depict facts that may "fall through the cracks":
•(1) Scenario: There are two short-sale lenders; the first short-sale lender's payoff/instruction letter permits only $10,000 of the $40,000 debt owed to the second short-sale lender to be paid and the second short lender will not accept less than $20,000. The Buyer has agreed to pay the additional $10,000 to the second short-sale lender. These facts must be disclosed to and approved by both short-sale lenders as the buyer is paying towards the seller's obligations.
•(2) Scenario: The short-sale lender issued the payoff/instruction letter and does not permit payoff from proceeds of a Seller's personal judgment (rather, requiring the seller to come up with money to close). The buyer has agreed to pay the money directly to the lien holder outside of escrow. These facts must be disclosed to and approved by the short-sale lender as the buyer is paying the seller's obligations.
Most short sale lenders require that an estimated HUD be approved by them PRIOR to the close of transaction. Their approval must be in writing. Verbal approval in any form is not acceptable.
Closing will not occur until all of the instructions and requirements of the short sale lender(S) can be met. Keep this in mind and your "Short Pay" closings will be smooth and stress -free.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary, therefore, please consult for specific advice.
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