Home Buying in 08610>Question Details

Dave Kim, Home Buyer in Placentia, CA

FHA ammendatory clause

Asked by Dave Kim, Placentia, CA Thu Aug 6, 2009

An escrow has been opened for a foreclosure house that I am about to purchase. my agent was asked by our lender for an ammendatory clause to be signed by me, seller (a bank who owns the property), and the listing agent. The lender is saying that the underwriter won't review until they receive this clause. but the seller is taking their time and our lender has not received the clause. I just wanted to know if it's true that a lender won't review loan application until they receive the clause. thank you

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6
Love when realtors answer mortgage questions. They are assuming and that's not good. Yes, a lender can do and or ask as the please. BUT... it's not mandatory to have this filled our prior to underwriting. It can be conditioned for.


thanks,
jeff


Jeffrey J. Belonger
Area Manager/Branch Manager

Infinity Home Mortgage Company, Inc
Processing : 800-587-2762
Cell : 609-440-5133
Fax : 775-361-6619

Profile : http://www.activerain.com/jeffmortgageman


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1 vote Thank Flag Link Thu Sep 3, 2009
David Kim:

The lender can do as they please about starting the reviewing process. They can also demand any documentation that they want that is not specifically forbidden by law. They are really doing themselves and everybody involved in the transaction a huge favor by not wasting time on a loan that will never be approved. It is their money that’s being put at risk, after all.

Better to have them delay the start of the lending process then to ask for things in dribs and drabs, which is done far too often. There have been deals that died the day of closing because some underwriter got the wind up, as they say. This can not only be traumatic in itself, it can be damaging to the parties to the transaction. The seller may have purchased a new property based on the funds coming from the sale. Now what can he do? The buyer may have made commitments and expended funds too and they will not all be recoverable. Much better to get things all on the table early, don’t you think?

Bill Holt

P.S. Are you buying in Trenton or Hamilton, NJ in zip code 08610 in or in a western area whose zip starts with an 8 instead of a zero?
0 votes Thank Flag Link Fri Aug 7, 2009
Dave,

In my view, yes, you must comply and in my recent experience expect more "amendatory clauseses".

I just today completed an FHA deal and encountered soooooo many out of the ordinary requirements from the FHA lender, one of which was an amendatory clause. When I inquired as to what exactly what I was signing they stated that it was a vehicle for them to ensure that the buyer, seller, buyer's agent and seller's agent did not have any unscroupulous (?) past dealings in the past. So, hey, I was OK with that as I was sure that I am my seller were on the up and up.

Four days prior to closing, I was then asked for yet another "amendatory" document . . . a amendment to the contract that ensured that the sellers were not leaving any personal belongings (i.e., window screens - huh?). My sellers were graciously leaving some personal items (in addition to the window screens, washer, dryer, etc.) to the benefit of the buyer. Although I initially agreed to immediate provide same I realized that as a Realtor I had NO AUTHORITY to provide an "amendment" to a contract once said contract was transferred to the attornies and immediately brought it to the attention of the buyer's attorney (who agreed that I had no authority and took full control of the situation).

My point, (1) inquire as to what you are signing and (2) know that this may not be the first ridiculous amendatory clause you will be asked to sign.

Love and Peace,
Francesca, Realtor, ePro
Francesca@PatrizioRe.com
Web Reference: http://www.PatrizioRE.com
0 votes Thank Flag Link Thu Aug 6, 2009
Amendatory clause is a must for FHA, sellers, buyers and agents to sign the document otherwise underwriter can’t submit the file to HUD. In the case of a short sale or pre-foreclosure the agent can have the mortgagor signed; if the property is an REO then someone at the bank or executor needs to sign the document.

Pablo López
Century 21 Elite Realty, LLC.
337 Changebrige Rd
Pine Brook, NJ 07058
Office: 973.244.7980 Ext 215
http://www.pablolopez.biz
Web Reference: http://www.pablolopez.biz
0 votes Thank Flag Link Thu Aug 6, 2009
Hello, Dave!
How are you?
If you are applying for FHA loan, yes, the ammendatory clause must be submitted to underwriter with all other documents as well.
Yelena
0 votes Thank Flag Link Thu Aug 6, 2009
Hi Dave,
From my experience with FHA loans yes this is necessary. I usually haven't been asked to sign until later in the process but I think it should be signed when escrow is opened.

Hope this helps.

Micki
0 votes Thank Flag Link Thu Aug 6, 2009
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