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PMI Short Sale question

By Vicki Watzlawick

Managing Real Estate Broker with CORE Realty (The Watz Team)

June 16, 2008 12:02 PM

Question for all of you Short Sale Experts

I pride myself on my 100% of my short sales have closed reputation. But today I got a new closing condition thrown at me! Citi Mortgage wants my seller to pay the PMI Company $13,000. We agreed and went back and found another buyer that was willing to come up the $13,000 they were looking for, so i submitted the new HUD to the lender and on the PMI line I put the $13,000.

Citi Mortgage emails me back this: "I will send you the approval letter and note and just follow the terms of the approval..thanks and have a nice weekend. Do not put it on the HUD 1..thanks."

Do NOT put it on the HUD she states! Isn't this illegal? I can not, nor can our 2 attornies figure out why we can't show it on the HUD? And for the life of me I can't get her to call any of us on the phone or explain it in a email either.

Any ideas?

Thanks!

Vicki Watzlawick, Broker Owner, Exit Platinum Realty, Lake In The Hills, Illinois

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Dennis Erickson

Berkshire Hathaway Home Services Montana Properties - Bozeman, MT

My Best..., Always!

Dear Vicki,,

I can't tell you if it's illegal or not, but I can tell you it's not safe to do. This is exactly the type of thing we as real estate professionals are held accountable for. A good rule of thumb is if it's not allowed on the HUD-1 someone needs to explain why to you in writing, signed by someone in authority and releasing you from any liability associated with the decision. There isn't a commission out there large enough to buy you out of a prison term and that's what's happening out there. Be careful. Just the fact you questioned it is a great sign you're watching your business. Keep up the good work.

Jun 16, 2008 12:09 PM

Steve Homer

The HBH Group (Keller Williams affiliate) - Round Rock, TX

By RESPA rules the title company and the agent can be held accountable for any transaction dollars that do not appear on the HUD-1. HIGHLY UNETHICAL and in Texas, it can cost you your license!

Jun 16, 2008 12:22 PM

Denise Allen

Resh Realty Group - Chesapeake, VA

Realtor@ Chesapeake, Hampton Roads

Thats what I am always told also. If it can't go on the HUD it must be illegal.

Jun 16, 2008 12:45 PM

Fred Glick

arrivva, inc. - San Francisco, CA

We fixed real estate

I don't know what Citi is up to, but I would let Citi know that you are going to ask for opinion letter from the State and or the Federal Attorney General's office along with the Real Estate Commission in your state for a waiver for you and all concerned with the transaction.

Jun 16, 2008 12:47 PM

Vicki Watzlawick

CORE Realty (The Watz Team) - Algonquin, IL

Illinois Foreclosure Expert, The Watz Team

Thanks Dennis, Steve and Denise But this is the LENDER instructing me to do this. You saw her words exactly as she wrote them. I'm going to try and get a hold of her supervisor tomorrow and get to the bottom of this! I was just hoping someone could explain why they thought she wanted it this way. There HAS to be a reason.

Jun 16, 2008 12:49 PM

Thanks Fred, I thought I would get her attention by having the attorney address this issue, but that didn't help at all. He and I both just keep getting back one liners that tell me the PMI can NOT be shown on the HUD. ARRGGGHHHHH!

Jun 16, 2008 12:53 PM

Anonymous

Jeff Nydegger

Let meknow if you need the name and number of one of Citi Group's Loss mIt. superisor. PMI has never been an issue for us, i bet the itigator is either brand new, or very seasoned and has a hue work load in front of them.

info@nysengroup.com

Jun 17, 2008 03:30 AM

Thanks Jeff! I emailed you for it. Every bit of help I can get helps! Thanks again!

Jun 17, 2008 04:59 AM

Fernando Herboso - Associate Broker MD, & VA

Maxus Realty Group of Samson Properties - Clarksburg, MD

301-246-0001 Serving Maryland, DC and Northern VA

never heard of that before. . .but seriously 100% close ratio for short sales?

I have 25 listings right now. .please come to work for my group!

Jun 21, 2008 02:08 AM

Thanks Fernando! Yes Sir..they are a LOT of work but if you have that never give up attitude and can negotiate well, I believe ANY agent out there can be taught to handle short sales!

IMPORTANT UPDATE:

I should have the PMI issue addressed be the end of the week next week and I will let you know how it turns out..but I did learn WHY they want that amount...the PMI companies that receive the insurance money and are guaranteeing the lender they will payout 20% of the loan if the seller defaults..so this is the amount that is left after all of her premiums she has paid in already. She's paid about $16,000 into PMI already so add the $13,000 to that and that is the 20% they would have had to pay the lender. Now why we can't pay for it on the HUD is still an issue I will find an answer for! Hope this helps!

Jun 21, 2008 02:25 AM

PMI Short Sale question

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Vicki Watzlawick

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