What was once the area of vague innuendo and assumption and presumption of DEFICIENCY WAIVER intentions and meaning behind Short Sale Approval Letters is finally – after 5 years of confusion – becoming clear and concise. The question of course is – IS THE BANK WAIVING THE DEFICIENCY? Bank of America has now addressed that issue, at least for some of the loans they service.
Below you will see an approval letter received in September 2013 from Bank of America. Compare it to the one a few years ago found about the 2010 letter changes at BoA in my article Bank of America Short Sale Approval Letter Changes.
Now see the below first page. Instead of one paragraph saying there is or is not a waiver of deficiency, there is a whole page – FOUR paragraphs! Count FIVE paragraphs if you add the credit reporting disclosure on the second page.
A recent PNC short sale letter we were shown said nothing about waiver or retaining rights concerning a deficiency. The letter did say that the credit bureaus would receive reports of the loan being “legally satisfied for less than the full balance” and that the lender would record a “Satisfaction of Mortgage”. Relatively pointing in the direction of a no deficiency short sale one would think – until the lender negotiator put in an email that the deficiency was not being waived unless an agreeable sum was paid to the lender for that waiver. The email and the letter are opposites.
Go below to the third page and see another change – the “deed restriction” in paragraph 17 of the letter clearly puts right in the short sale approval letter the anti-flipping condition with specific language to be put in the deed of conveyance (the Warranty Deed).
In paragraph 18 you see the dreaded “Your Servicer Has Changed” event. And it spells out that if the servicing changes between the issuance of the short sale approval letter and the closing – this approval letter is garbage! The new servicer is NOT required to accept the terms of the short sale approval letter! And I thought the servicers represented the lender/investor, who ultimately approved the short sale in the first place!
Lastly, see the last page where the lender wants 72 hours – that is 3 whole days – to review the HUD before you can close. How many HUDS involving a new buyer loan are ready 3 days in advance? Hmmm, you have that problem too?
What new clauses have you been seeing in your short sale approval letters?
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© 2013 Richard P Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES
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