Financing in New Orleans>Question Details

Homeless Buy…, Home Buyer in New Orleans, LA

I am in the middle of a weird real estate deal.Cartus is selling the house. The lender says it is a flip, the title company says it is not.what to do?

Asked by Homeless Buyer, New Orleans, LA Thu Aug 5, 2010

The title company says to go with a different lender. The lender says to go with a different house. The lender has been great as they helped me clean up my credit and now I am where I can get approved. There is a lot of ill will between the title company and the lender because the title company also represents Cartus. For two week Cartus made no response when the lender notified them daily that they had conditions to fulfill. Suddenly the woman at the title company handed it off to the closing attorney who proclaimed Cartus was done. I want the house, or I would have walked already. The main sticking point is the lender says that Cartus can't sell something they don't own.

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Homeless Buyer,
The thing is that Cartus suggests using Bank of America or Wells Fargo, and we are using one of them! Do you happen to know who at Cartus manages the relationships between Cartus and these lenders. We are in serious jeopardy of losing this home. Cartus is threatening to go with a back up offer, but this is a debacle of their own creation, so they will be sued if it comes to that.
Any advice you can offer given your past experience would be helpful! My direct email is vmoncr<at>yahoo<dot>com
0 votes Thank Flag Link Tue Apr 26, 2011
Velvetradish,

We ended up in the house. I don't know who was getting kickbacks, but when we switched to the lender that Cartus wanted us to use, Cartus suddenly was able to produce everything the underwriter wanted. On the upside, interest did go down a quarter of a point while going with a different lender.

The deal almost fell through at closing. There was an electric bill after the previous owners moved out and closing because the electric had to be on to keep the pool running etc. Cartus wanted us to pay it so we walked out of the closing and told them to call us if they still wanted to sell a house or to cough off what they owed for the default.

The other problem with closing was the final walk through. The day before closing they couldn't find the key to the house until after dark. We were unable to see that they hadn't cut the grass as agreed and hadn't cleaned as well as agreed.
0 votes Thank Flag Link Tue Apr 26, 2011
We are dealing with EXACTLY the same issue right now. We have three RE attorneys working to resolve this, but our lender (a "Cartus approved" lender and a huge national bank) and Cartus are at an impasse, with our lender saying that the deed is still in the original owners name (true) and that therefore Cartus does not have the right to sell it. However, the original owners signed the standard relocation company Power of Attorney giving Cartus. We also signed several addendums to the original Offer to Purchase. It is a complete mess, we were supposed to close a week ago, and my husband and I, our two young children and our dog are staying with my parents while our 18,000 lbs of worldly possessions are in a warehouse. We have already paid for the move that was supposed to end up in a house, and now we'll have to pay for a second move. If we go with a different lender we may face the same issues. If we didn't love the house I'd be bailing, buying another home, and sueing the lender for breach of contract. Our attorney advises us we have sufficient grounds.

To the "realtor" who comments in numbered bullet points below, he clearly has not ever dealt with a relo company, and doesn't understand the logistics and legality of this complex situation.
0 votes Thank Flag Link Tue Apr 26, 2011
We live in Virginia. We are going through the same thing. We are 100% approved except the underwriter did not want to approve due to title-the title is still in the homeowners name and they have relo'd to Texas-Cartus is selling their house. We want this house and are concerned that even though we are going with a different lender and loan that because the title is held buy the homeowners not Cartus that we are not going to get this home. We live in Fairfax County. Are there any lenders out there that trust Cartus-in Northern Virginia in Fairfax County?
0 votes Thank Flag Link Sat Aug 28, 2010
Cartus is a relocation company and is exempt from the flip rules. They will take ownership of the property for a relocation transaction after certain requirements of the contract are met. Normally when the repair release addendum is signed is when they take ownership of the home. The IRS has determined that there has to be some risk to the relolation company in the transaction or all the costs in the move are a taxable event for the relocating employee. Tell you lender to get with the program and get this thing closed. It sounds like you are going with a FHA loan and there are quite a few lenders that have had to buy back loans that did not meet some FHA standard. These people may be gun shy and want to make sure that this is not a loan that they will have to portfolio.
This is not legal advice or lending advice I just deal with relocation properties and this is what I see going on.
0 votes Thank Flag Link Sat Aug 7, 2010
There is alot going on here. First, Cartus is a relocation company. They assist employees being transfered. They either pay moving costs and assist with the sale of their current home as well as assist them with the costs of the new home, or they buy out the seller and sell the home as a company owned home. It's unlikely that Cartus is dealing with a flip house.

Even if this was a flip house, the flip stipulations have been suspended until sometime in 2011 so the 90 day flip rule wouldn't apply.

If they are assisting the homeowner, the sale goes through Cartus paperwork and Cartus handles the transaction. Not sure what the lender means by Cartus not selling something they don't own.

What does the attorney mean when stating Cartus is done? Done with what?

There are too many unknowns here to give better advice. At this point you may want to contact a real estate attorney who can straighten all this out. Best of luck
0 votes Thank Flag Link Fri Aug 6, 2010
Problem #1: You are not represented by anyone
Problem #2: You lack the experience to understand what is going on
Problem #3: Until you decide to have an experienced Realtor help you at least work through the process of who represents who and what and for what reason you will continue to fumble.

If you disreguard all three of the above you will end up in court or lose whatever money you have in it so far.

Bottom line: Seek professional advice...and be willing to pay for it this time. Right now there are several people under investigation in the New Orleans area proclaiming to be "wholesalers" etc who need to be in jail but generally run off to Florida whenever the authorities come a looking. The only flipping going on in real estate that won't land someone in trouble or losing money is at Port O Call, Burger not much of a King and Rallys.
Web Reference: http://iansellsnola.com
0 votes Thank Flag Link Fri Aug 6, 2010
Realtors, builders and title companies have a long history of steering buyers to their "friends"

You are the buyer, you are paying for the big show! If a Realtor, Builder, or title company tries to strong arm you into using a different lender, tell them to bite it!

Remember, these idiots work for you!
0 votes Thank Flag Link Fri Aug 6, 2010
Your lender is right. If the seller does not own the property, then they can not sell something they don't already own. It doesn't matter which lender you are going to, as long as you are financing the purchase, they will all tell you the same thing. The lender will not finance your purchase of a home so that the seller can use the proceeds of your purchase to make their purchase between the original property owner and them. Lender needs to know the true value of the property and will not allow room for anyone else to create profit outside of the normal trasaction fees.
0 votes Thank Flag Link Fri Aug 6, 2010
A flip must have a certain period of time elapse before it can be sold using several gov. regulated instruments . That is probably what your lender is alluding to. It sounds to me as though your title co. has a conflict of interest . I just closed one with an uncomfortable alliance between a bank owner and the title co. I would not put my buyer in that situation again . Where is your agent ? He or she should have helped you with these decisions .
0 votes Thank Flag Link Fri Aug 6, 2010
Well the question is, is it a flip? What are the circumstances that the lender is making this claim? I probably would consider changing lenders. Do not be concerned about the lenders welfare. Eliminate the situation involving dual representation. Please call for further consultation. Paul Finholt, Broker, Renaissance Realty, Inc.
0 votes Thank Flag Link Fri Aug 6, 2010
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