When closing a short sale don't make this possibly "fatal" mistake!

By
Real Estate Agent with REMAX of Valencia/Santa Clarita CalBRE# 01729357

 

I just closed another successful short sale, but It could have been a disaster because of an easily overlooked paperwork situation that had come to my attention that many agents probably make, and live to regret. In this situation both notes for the 1st and 2nd mortgages were held by the same bank and both investors had agreed to the short sale. Each of them signed off an approval separately,however after the close of escrow date had been moved up by only three days from the original HUD date, due to the buyer's loan processing delay, a delay which was approved of by the bank negotiator, a new release letter or final approval letter was issued that had both the first and second loan on one sheet of paper. This was deemed as  "unacceptable" by title, who claimed that there now was a "cloud" which had to be cleared up before they would allow title to be recorded. Mind you now, the buyer's loan had already funded, my escrow officer, a short sales specialist,  had not noticed the problem either,but title required a new and separate letter from the investor/lien holder of the 2nd before they would allow it to record. Realize, we did have approval from the 2nd but it was listed on the same paper as the approval from the holder of the 1st. I had to call the bank and make a request for a new letter, at this point the bank negotiator's immediate response to my call was, "do you have any extra money?" I replied "no" in fact we did not. Luckily for us, the investor resigned a new and separate paper that day so title now had the release of the first and the second on two SEPARATE sheets of paper and all went well, we closed the following day. Another "near miss" but successful landing in the life of this short sales negotiator.   

 

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short sales
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short sale expert
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stevenson ranch short sales
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Rainmaker
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Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Hi Lauren - All is well that ends well and that is what is important! Glad to hear your short sale was a success.

Aug 19, 2008 01:54 PM #1
Rainer
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Jason Renno & Keith Renno
Wintrust Mortgage - Valencia, CA

Hi Lauren,

Wow I haven't came across this situation as of yet, but great to know. I had an agent from the valley recently tell me we were ready to open escrow because he received a letter from County Wide who held the 1st an 2nd. The agent didn't realize that the letter was only for the first not including the 2nd. The escrow officer didn't pick up on this as well. It would nice if sellers were able to somehow screen Realtors to ensure they are working with a short sale specialist like yourself. Congrats on your closing!

Keith Renno

Sep 18, 2008 09:18 AM #2
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Rainer
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Lauren Nemeschansky

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