Coveteran, Home Buyer in Byers, CO

Short-sale bank (Chase) decides on its' own to change an ACCEPTED/SIGNED contract a day before closing.

Asked by Coveteran, Byers, CO Thu Jun 23, 2011

I put a contract on a short-sale house in Colorado Springs. The seller AND their lender ACCEPTED and signed the FULL price offer. I asked for $1900 in closing costs. That was OVER a month ago. Now, a day BEFORE closing, CHASE decides they aren't paying the $1900 in closing costs, but will pay $1700. I have decided to make up the difference. However, is this 'legal'? Or is this just an ETHICS problem with a big lender? Ihave had to make multiple personal sacrifices to make this deal happen, to include, transfering/turning on ALL utlities into my name for the appraiser/inspector. I had to buy replacement APPLIANCES, that were missing for the FHA loan I am getting.

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Well I am glad it sounds like it's worked out somewhat to your satisfaction, congrats on your closing and your new home!
0 votes Thank Flag Link Fri Jun 24, 2011
I, personally did not recieve an approval letter from the lender. Although there must be one, as we are closing in a few hours. I am going to pay the $200-extra. It seems arrogant to fight that relatively small amount after all this time, expense and energy. (It has only been a month-so don't get me wrong, I am happy that it is going this quickly, being a short-sale and all). I still question the decision makers at CHASE for their lack of attention to details in the contract that they accepted. I must take some of the responsiblity as a home buyer, because I didn't read all of the FHA guidelines. From what I have learned, is that the SELLERS should have the utilities on. In this case, they refused, seemingly to keep me from going forward. I should have seen that there must be appliances. And you are right, I did get on heck of deal if we do infact close! But, until I have the SIGNED docs and KEYS in my hand, I am not going to get too excited. Thanks for all of your input, I learned alot on this one!
0 votes Thank Flag Link Fri Jun 24, 2011
I agree w/ Chuck that your closing costs were maybe affected by the 1% rule allowed for FHA loans. Nobody has ever said that buying a short sale is easy. And no short sale is final until you close. It's not a legal issue or an ethics issue. It just is what it is.

Yes, you have made "sacrifices" but guess what? You're probably getting a pretty good deal on a house, you're only having to put down 3.5% (the MINIMUM) and you're getting a portion of your closing costs PAID! What else do you want? I say be THANKFUL. What's $200 in the grand scheme of things?

It's too bad that you didn't know about needing to put utilities into your name, and having to buy appliances for FHA purposes. Your agent or lender should have mentioned this might be an issue. Hang in there and enjoy your new home!
0 votes Thank Flag Link Thu Jun 23, 2011
I am also curious. Did you receive an actual approval letter from the bank? This would have been given after a preliminary HUD was submitted. If anything changed from the preliminary HUD to the final HUD, the bank may be taking it away for to make up the difference as has been previously stated here.
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0 votes Thank Flag Link Thu Jun 23, 2011
Something doesn't sound right to me. First of all, lenders don't sign short sale offers. They write Approval Letters, with the terms they will accept. Did you receive an Approval Letter? If the letter stated they would pay the $1,900, and all other terms of the offer and Approval Letter remained the same, they typically would not try to change the $$ amount toward closing costs. You could contact an attorney and make sure it's ok to follow the Approval Letter. Although, it's probably less expensive to just cover the $200 and close. Without knowing all the details, it sounds more like a miscommunicatoin somewhere, or a possible oversight on the HUD that may have needed to be covered by other funds.

Feel free to call me anytime ot discuss your specific situation.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes Thank Flag Link Thu Jun 23, 2011
From the order of events (or the order you typed in) it sounds like the seller/Chase accepted your offer - then you asked for $1,900 afterwards... is that the case, or was the $1,900 seller credit part of your initial offer? In all of my experiences with Chase there is a final short sale approval addendum that more or less trumps most items in the initial purchase contract - and that short sale addendum specifies if Chase will be paying any of the buyer's closing costs. Did you get such addendum with it saying Chase is agreeing to pay $1,900 in buyers closing costs?

Short sales are difficult, if the property owner has already vacated and turned off all of the utilities it's not surprising you are having to make more sacrifices than the typical buyer, as the seller has probably already resigned to not caring much about the home (otherwise they'd probably be living there) so it's you, your real estate agent and your loan officer as a team who need to make it happen. Not that it matters now, but in hindsight you may have wanted to look into the FHA 203k rehab loan so you wouldn't have had to spend money installing appliances into a home you don't own yet.
0 votes Thank Flag Link Thu Jun 23, 2011
The thing that pops out at me first is that you said you got an FHA loan. If the home was an FHA insured home then they will ONLY pay 1% towards buyers closing costs. I dont know your sales price but see if that fits.Other than that, there are many things that could have caused this. Tooo many to go over here. Short sales are difficult and congrats to actually getting to closing though.( I am curious if the math works to the 1%)

Chuck Wartman
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0 votes Thank Flag Link Thu Jun 23, 2011
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