Foreclosure in Scottsdale>Question Details

nicolelazar, Renter in New York, NY

We are purchasing a bank owned property. loan funded this past Friday, but the seller(also the same bank as is lending us $) hasn't signed the

Asked by nicolelazar, New York, NY Mon Dec 3, 2012

hud How long does the seller have to sign the HUD? The loan has already funded but they will not give us possession of the home.

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Jim Mitchell’s answer
Possession takes place upon the recording of title at the country recorder's office, NOT upon funding of your loan. Your buyer's agent and the title/escrow officer should make you aware of that. I would also ask your agent to contact the seller's agent as soon as possible (if he/she hasn't already) to make them aware of the situation. Most of the time, the listing agent has direct access to the asset manager who is responsible for your file and they can follow-up to ensure it's taken care of in a timely manner.

That being said, sometimes in the sale of a bank-owned property it can take 3-5 business days to receive the final HUD approval/signature back from the seller. I am a bit surprised that your lender went ahead and funded it without that final seller signature but it's quite possible that they had final HUD approval from the seller (typically the lender must have approval or they can't fund the loan).
Maybe you have a rate lock expiring and they needed to fund it by a certain date? That happens all the time. Talk to your lender; I'm sure he/she can explain why it's already funded without the seller signature.

The best guess is that the listing agent who works for the seller is confident that the seller will sign the final HUD; it's just a matter of being in line with the thousands of other transactions that the seller is working on at any given moment.

Hope that helps! I don't believe there's any need to contact an attorney just yet, but that's your choice entirely. I would think between your agent, the listing agent and the title company, it will all work out in the next couple of days. If it doesn't, then it might be best to take some additional steps to reach the seller and find out what is going on.

Jim Mitchell
Realty ONE Group
0 votes Thank Flag Link Mon Dec 3, 2012
Thank you for your help!
Flag Mon Dec 3, 2012
Unless there is a problem with the settlement numbers this should not take more than a day or two. This is not uncommon, banks are notorious for not caring about time frames. The asset manager takes a couple of days off and you wait. The title company probably sent them the HUD via fax or email and is just waiting. Keep on the title company and make them contact the seller and get someone to act.
0 votes Thank Flag Link Mon Dec 3, 2012
You most likely have two completely different departments working on this sale. First you have the REO department of the bank which has to ultimately approve the final hud and make sure the numbers are exactly as they expected. Some times that process can take as little as 24 hours and other times 3-5 days. Then you have the lending side of the same bank that has obviously approved your loan. These two departments most time do not talk to each other. This is the same reason that sometimes when we have owners doing short sales the foreclosure department is messing things up for us. Internal communications at large companies is poor at best.

Typically a title company will not let the buyer's loan funds get wired until to the selling bank has finalized the hud. When you say it has funded do you mean you signed docs and the loan is ready to fund or did they actually send your wire to title? I suggest calling title to ask for an update. If they can't give you any more info, ask your agent to call the listing agent to find out the hold up is.

Wishing you all the best in your new home.

Howard Rudin
0 votes Thank Flag Link Mon Dec 3, 2012
A few other recommendations:

1) Re-read your contract - many times the answer is in there. Look for clauses on time periods, notice to perform, and breach of contract.
2) Talk to your Realtor for what to expect and best course of action to meet your needs.
3) Talk to the Escrow Officer - they are a neutral 3rd party and can be very helpful.
0 votes Thank Flag Link Mon Dec 3, 2012
When you say they haven't signed the HUD, do you mean they haven't approved it? NY is an attorney state so may be different there, but when a lender "funds" your transaction it doesn't mean your done yet. Title still has to record the transaction for you to be legal owner of record. Your funding lender may have to take funds back and reissue depending on their requirements. REO sellers operate within their own rules and its often times very frustrating.
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0 votes Thank Flag Link Mon Dec 3, 2012
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