Can The Short Sale Lender Reverse The Sale Weeks After Closing?

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

tutas towne realty

Hi folks. Just when I think I have this Short Sale stuff figured out I run across another issue that has the potential to really place my sellers, the buyers and the agents in a difficult quandary.

Recently I received a phone message from Chase in relation to a Short Sale we closed on almost two weeks ago. It went something like this "Hi this is Sarah from Chase calling on LN# 11324567. I am preparing the post closing package to send off to the Investor and noticed that I need the last 2 months bank statements from the Borrower. Please fax these over to me by the end of business today or I will return the check and close the file. Thank You."

YIKES!!! This call came in at 1:00 in the afternoon while I was out of the office. So needless to say I had to scramble to reach the Seller and luckily she was able to get the statements to me in time. I was lucky because my Seller was in the hospital but just happened to have her relative in town who was able to run around and get this taken care of.

The Buyer has already spent about $10,000 rehabbing since he closed on the property two weeks ago.

The frustrating part is that Chase had issued the approval and approved the final HUD for closing.

This has happened to me 3 times over the last few months. You know....I can understand the Lender requesting additional information after closing to complete a closing file but this threatening to return the check and close the file is really starting to piss me off. AND....they only give you a few hours to solve the problem after it took them 7 months to approve the deal.

So....I wonder what would happen if they did return the check and closed the file? The deal has already been closed so I'm pretty sure they can't undo that. Could they? Could they refuse to remove the lien even though all closing conditions were met? What do you think?

 

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***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas

 

 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Rainmaker
1,513,477
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

I may be out on a limb here but I would say there is no way they can undo what they already approved as long as no fraud was involved. They really do need to get their act together!

Dec 02, 2011 08:04 AM #1
Rainmaker
525,303
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

That is scary Bryant. When is closed really closed? Hadn’t the lender signed the lien releases, etc. 

Dec 02, 2011 08:05 AM #2
Rainer
286,848
Thomas McCombs
Century 21 HomeStar - Akron, OH

Once the deal is closed it is over, at least in Ohio.

I can just imagine how the court would look at me if I, as a seller,  went back to a buyer and said I wanted to undo the deal after the deed was filed.

I would suggest to "Sarah" that she should just close the file and hope she does not get fired for negligence by her boss.

Dec 02, 2011 08:20 AM #3
Rainmaker
522,924
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Bryant - I think it was an empty threat from a clerk who missed a block on her checklist. I bet  their management would think otherwise.  That is just craziness.

Dec 02, 2011 10:23 AM #4
Rainmaker
1,526,296
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

I'm with Wendy on this one. Empty threat or one that is not enforceable. Next time why not call one of the attorney's on the file & let them take care of it? Title has already been cleared at a closing in IL so I'm not sure what they could do to that, checks clear the bank fairly fast too!

They're blowing smoke up your skirt luv!

Dec 02, 2011 11:26 AM #5
Rainmaker
710,558
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

If it's closed, and it's recorded, what is left for the short sale lender to do?

Like Wendy, I think this is an example of people either misplacing files, or passing around the files so much that they lost track of what stage it is in. 

 

Dec 02, 2011 03:02 PM #6
Rainmaker
414,602
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Me thinks this is an empty threat.  

Although it may be an effective one because who wants to call their bluff, really.  I've had this threat about things that were on the short sale approval letter -- certified HUD signed by everyone, etc., yada, yada.  Maybe then they have an argument.

But banks statements?  Doubt that was a condition of the approval.  Of course, what else could she say to get what she wants immedately?  It is the only card she has left -- unfortunately for her, it is bogus.

I'm with you, I'm tired of this move as well.

Dec 03, 2011 11:29 AM #7
Rainmaker
161,892
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Actually they will send the funds back, but after the title insurance lawyers get involved, everything becomes fine.

I even had one make a mistake on their net payoff for about 8k in difference. They wanted us to come up with that difference after we closed a week prior or they will reject the wire and short sale. End result, they ended up eating the 8k loss and nothing happened to us.

I have processed 4 threats to date and nothing happened. I don't know about your state since you guys do judicial foreclosures and our state is a trust deed state, but I believe title transfers follow the same logic.

Also, great job on your comments on the featured blog about asking for increased co-broke. It is amazing how many people in this business lack the knowledge of such a simple and crucial aspect of the real estate business.

Dec 05, 2011 10:15 AM #8
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Rainmaker
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