Home Buying in San Jose>Question Details

Marc Perkel, Home Buyer in 95020

I'm helping a girlfriend with a real estate problem. She is in the process of buying. She went into the title company office 2 days ago to sign

Asked by Marc Perkel, 95020 Thu Feb 11, 2010

the final papers. However, the amount due was about 10k higher than expected. Upon investigating we found a variety of bogus charges. I then read her contracts and there are terms in there that were very different than what she agreed to.

This is a short sale deal and there are two lenders involved. She made two separate escrow payments. $3880 for one lender and $10k to the other. In the final papers no where does it reference the second lender nor does it reference anywhere the $3880 she paid in.

At this point she freaked out and wants to back out. I'm helping her analyze everything to see if it is salvageable but there are a LOT of strange things going on and although I'm keeping an open mind, this is very weird - and I don't like weird. I personally bought a home (forclosure) last june and when I got to the closing there wasn't anything strange. Can use advice.

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Answers

42
OK, I think this should be discussed off-line.
3 votes Thank Flag Link Mon Feb 22, 2010
It looks like the listing Broker and Marc are going to review this off line.

FYI buyers and sellers, when things like this come up, remember there are suggested ways to deal with it;

* Contact your own agent
* Contact your agent's broker
* Have your agent contact the other agent
* Have your agent's Broker contact the other agent's Broker
* Have the Escrow Company explain where they obtained the instructions for fee disbursements If these
methods don't work out review your contract rights, mediation, arbitration and litigation
* Contact California Association of Realtors http://www.CAR.org and the local Association of Realtors
* Contact the California Department of Real Estate
* Contact a Real Estate Attorney

And keep in mind you are dealing with humans who can and do make human errors. Most people don't like to admit fault and blaming can take place. When the parties take a step back (out of their ego) and review the contract and place their efforts as a team to resolve instead of blame, it will usually work out quickly and amicably. Agents this is to all of us too, it is a team effort to get these deals to come together we all need one another. And finally most Agents Realtors are honest and ethical with good intentions, and still human.
Web Reference: http://www.terrivellios.com
2 votes Thank Flag Link Tue Feb 23, 2010
Hello Marc,

As one of the owner of Silicon Valley Associates, I'm deeply troubled by your girlfriend's experience with our company. We have several agents under our brokerage and we do our best to make sure all our agents not only maintain their fiduciary duty to their clients , but treat every party in the transaction equally and ethically. If one of our agents conducted themselves in a way that was unethical or possibly illegal we will take action immediately.

We pride ourselves on our reputation not only in our community but in our industry. With that said I would encourage you to contact me directly, as I would appreciate the opportunity to speak with you and your girlfriend regarding the details of your transaction. That is the only way I'll be able to better understand what happened and address the issues directly.

Regards,
David Giambruno
david@svarealestate.com
2 votes Thank Flag Link Mon Feb 22, 2010
HI Marc,
As I posted before, I re post again hoping you will take the time to file this as a case.
I hope you will cunsult a real estate attorney and find out what is best to do.
You had asked who to turn this in to.,,,,
You should contact your agent and ask them to file a formal complaint at the local association of Realtors ASAP.
Also contact the local district attorneys office in your county.
the Department of Real Estate
The Attorney Generals office for the state of California.
Ask for Real Estate Fraud or Bank Fraud divisions.


my earlier posting.
HI Marc,
If you still have the information on a copy of paper, even if it did not go through, you would be wise to let some people know about it.
You should consider contacting
the department of real estate Jeff Davi
the Attorney General Edmund G. Brown Jr.,
The deputy district attorney of your county
even if it got straighten out.
Let them know who the players are
the title company
the escrow company
the lenders for the seller
the listing agent and brokerage firm
the agent representing your Girl Friend and their brokerage ( not to get them into trouble just to help and verify it all
If you send it it with just the explanation you see here, it is a start.
They will understand and they will look into the matter.
This is to save the countless numbers of people that are preyed upon.
I can assure you there is still a problem and somehow they swept it under the carpet.
the lender doing this needs to be caught
the escrow and title company needs to be caught as well.
I cannot say for sure but I would bet the listing agent is probably in on a scheme as well.
Please contact these people to help them watch out for all of us.
Trust me they want to hear from you!

Harold Sharpe
So Cal Homes Realty
(951) 821-8211
CA DRE License 01312992
Broker,
REALTOR®,
Graduate REALTOR® Institute,
Real Estate Masters,
Certified Distressed Property Expert,
Green,
e-Pro,
harold@socalhomesrealestate.com
http://www.socalhomesrealestate.com
http://www.facebook.com/profile.php?id=100000807660841
1 vote Thank Flag Link Mon Feb 22, 2010
Also David, your screwed our real estate agent out of about $700. She gave up that much of her commission to get the numbers to come out to what the buyer's contract agreed to. I'm not sure what went on behind the scenes but I can tell you it stinks.

I want you to make this right so I can come back here and tell everyone you made it right.
1 vote Thank Flag Link Mon Feb 22, 2010
Hi Mack, in CA the Escrow Company (just like WA) prepares the HUD.

Marc, like you, I'm confused. How come there are two different contracts? There should only be one with both seller and buyer signatures detailing what the parties agreed to. Since this is a sort sale the Lender of the Seller may have agreed to the contract subject to other conditions which affect the final closing funds and the Buyer and Seller would need to agree to that as well.

The Escrow Holder is the neutral 3rd party and should be acting on mutually agreed to terms. As you already know otherwise you would not be on this forum seeking solutions.

You can to go http://www.dre.ca.gov/ and check out the license status agents. Also http://www.dre.ca.gov/cons_complaint.html for complaints to the California Department of Realtors.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Sat Feb 20, 2010
Ron, right on.

Marc, I can't help but think that maybe, if your girlfriend had a good real estate professional on her side, this might have been solved without any drama whatsoever.

Every so often, a HUD crosses our inbox, sent by an escrow/title/closing company, and something will be out of line, and we'll call them up on the phone, explain what we see as the problem, there'll be an exchange of calls and emails, and the problem will get solved. We will, meanwhile, casually mention to our client that there's an error and that it's being taken care of.

Now, don't misunderstand. I think you did an admirable job. But, maybe, just maybe, her having someone who has negotiated and closed a whole bunch of short sales by her side would have been even more advantageous.
1 vote Thank Flag Link Sun Feb 14, 2010
Marc
It may be a bit frustrating but sometimes mistakes are made. I guess the question is are mistakes make. Go thru the HUD (final paper work) and account for everything. sit down with escrow and go LIne by line and you should be able to figure it out I would also contact her lender (if she is borrowing) and have them contact escrow to help straighten this out. Is the $10,000 and the $3880 on the HUD, it should be, NOTHING should be done outside of escrow.

I just went through this with one of my buyers who were contributing to the first and the second lien holders. Everything was accounted for on the HUD!!!

Good Luck
1 vote Thank Flag Link Thu Feb 11, 2010
Hi Marc

Glad that it all worked out. But what is amazing is that there were different contracts being presented
than written.

Clearly, there are some major issues.

Good luck.
Perry
0 votes Thank Flag Link Wed Sep 1, 2010
It's definitely time to get an attorney involved. More often than not lenders in REO situations have become bullies. The whole situation sounds extremely odd. Increasing a deposit is one thing, but making payments is another.

The main question is has she released her contingencies yet?
0 votes Thank Flag Link Fri Feb 26, 2010
HI Marc,

Take this to your local Congressman. The government is out to get "Weird lending practices". Getting lawyer will cost you more money that you shouldn't have to pay.
0 votes Thank Flag Link Wed Feb 24, 2010
Thanks Monamarie and everyone else.

I'm still waiting for Silicon Valley Associates to respond to me offline but I'm not afraid to complain where something happens that shouldn't be happening. Quite frankly I'm surprised by the number of timid people in the world that allow this sort of stuff to occur.
0 votes Thank Flag Link Wed Feb 24, 2010
Hey Marc,
Thanks for taking the time to bring this out in public. Too many times buyers get abused in these short sale transactions.

One good piece of news is the new RESPA that came out in 2010. Lenders can no long give borrowers a bogus Good Faith Estimate and then jack up the costs at the closing table. A lot of my fellow mortgage brokers/banks hate this new GFE but I love it because it protects the borrower from having to come up with $1000s more at the end of the transaction.

Best wishes,
Monamarie McCreary

Real Estate and Mortgage Broker
Web Reference: http://www.monamarie.com
0 votes Thank Flag Link Wed Feb 24, 2010
Hello Marc,

I believe I have acceptable answers to all of your questions with the exception of the last one (which I am still investigating). I will email you directly, the information later today.

Regards,
David Giambruno
0 votes Thank Flag Link Mon Feb 22, 2010
OK David, the short sale in question was at 464 Coyote Creek Circle. Can you explain the following:

Why wasn't the $3880 or the second lender mentioned on the original HUD.
Why was there and additional $495 charge added on top of your $990 short sale fee. (Both payable to Silicon Valley Associates)
Why did it have $500 added as a late fee that was not agreed to?
Why was a $300 appliance insurance policy added without the buyer's knowledge?
Why did the bank that had the first mortgage add a 1% loan fee that wasn't in the contract signed by the buyer?
Why was the contract that the buyer signed different than the one the seller signed?

The way I see it - it was at least dirty underhanded dealing if not criminal.
0 votes Thank Flag Link Mon Feb 22, 2010
Hi Terri,

The $3880 was made out to the title company. You are correct in that no mention of the second lender or the receipt of the $3880 is highly irregular. After we walked out the amounts were included on the second HUD that she actually signed and the second HUD did include the $3880 and the second lender. They also got rid of late fees and other charges they tried to sneak in there amounting to about $4000. At this point we're looking at filing some kind of complaint. I think what they did was criminal. Who do I report this to?
0 votes Thank Flag Link Sun Feb 21, 2010
Mark here's some answers for you in ( )

The lender for some reason decided to add a 1% fee that's not in the contract. $1829 (which lender? Buyer or Seller?)
They threw in a late penalty $500 - not agreed to (did the buyer have a lock rate and didn't close on time)
She agreed to pay $990 for a short sale processing fee but they added another $500 they call a transaction fee. (Sellars relator) (The $500 Transaction Fee is a realtor paper processing fee usually negotiated between realtor/agent and their client - not usually passed on the other other agent's client)
They added $300 for apliance insurance that was never discussed and not needed. (So this is a home protection warranty.. check the contract)
There are 2 lenders, but no where in the closing papers is the second lender mentioned. Nor do they mention anywhere a second escrow payment of $3880. It's like it's an undocumented side deal. (This should be researched)
There was a $700 charge for home owners insurance even though she already bought it. (If the Buyer is closing through escrow the first years Home Owners Insurance is added in - when would the buyer have paid for this?)
Something called TDB for Accomsignoff ??? What's that? (Accom..sign is to have a notary outside of escrow)
Email doc fee $75.00 (usually - escrow and title)
Load tie in fee $150 (check with the lender)
Doc prep feee $50 (usually - escrow and title)
Outside Courier/special messanger $$60 (usually - escrow and title)

The thing that really sticks out in my mind is that there are no docs referencing the $3880 she escrowed. (Where did she escrow that? Payable to ? Does she have the canceled check? Who cashed it?)
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Sat Feb 20, 2010
Who prepares the HUD in California?
0 votes Thank Flag Link Sat Feb 20, 2010
Hi Andrea,

It's not that she signed a contract that was different than she agreed to it's that the HUD was different than the contract. And apparently the seller got a contract that was different than the buyer. Silicon Valley Associates was doing some very bizarre stuff. When we walked away from the HUD they took out the garbage and made the HUD match the contract. But it took walking out to make that happen.

It seems that presenting a HUD with a bunch of garbage fees in it that weren't agreed to would be illegal.
0 votes Thank Flag Link Sat Feb 20, 2010
This sounds really fishy to me. She needs to talk to her Realtor, her lender, and her escrow officer. They should have gotten a copy of the closing statement before she went to the signing and made sure everything on the statement matched up to what the contract states. Making sure she doesn't pay for anything not previously agreed upon is their responsibility. If there is stuff on there that she did not agree to pay, and neither her Realtor or her lender caught it, she should ask them which one of them is going to pay for it. She should not sign or bring in funds until her questions are answered. Sometimes it is better to walk away. Good job, you, for helping to insure she is not being taken advantage of. Buying a house is a big deal and "there are no stupid questions." Best of luck and follow your intuition.
0 votes Thank Flag Link Thu Feb 18, 2010
The seller real estate agency is Silicon Valley Associates of San Jose. I don't know who was trying to pull what but I'm pretty sure that most of the improprieties were their responsibility. I am interested in learning about who to complain to because what happened definitely crossed the line into criminal behavior.

One of the things we were told after the fixed the HUD was that the seller was given a different contract than the buyer. And I know that can't be right.

The latest surprise, when we went to take possession we found that the seller (it was a short sale) hadn't completely moved out yet and the garage which we saw for the first time was full of their stuff.
0 votes Thank Flag Link Thu Feb 18, 2010
Marc

There are rumors of fraud coming from the banks - imagine that! - but, you had a knowledgeable agent walking you through as best they could.

There are no rules and with multiple banks it can get crazy confusing.

I have walked away from many a closing where the loan was not as presented - now we are seeing some of that in the shortsales.

Good Luck!

Rebekah
0 votes Thank Flag Link Tue Feb 16, 2010
I'm going to write more details after Wednesday when she actually gets the keys. Yes - we had a real estate agent. Our agent was very surprised but what happened as well. Her agent wasn't sent the HUD1 in advance. There were things that happened that I still don't know about and I'm going to look into after this is over.

Our agent is someone who I used when I bought my house last June and she is excellent.

One element in this scam is an artificial time pressure is created. "It's a short sale and it's all going to fall through if not completed by some unrealistic date. Then the date passes and it's like they are barely holding on to the deal. And the delay is because of all the paperwork that her lender requires (probably all lenders) to make it happen in 3 weeks. So it's all rush rush rush creating an environment where the HUD1 is loaded up and if you take the time to look at it then you'll lose it.

However the day after she walked away from the HUD and told them we were walking away they had the house listed the next day to sell to someone else as a short sale (rather than a foreclosure). So the whole time thing was artificial.

There was something else that happened that apparently (from what we were told) that the contract the seller signed and the one the buyer signed were different. And that definitely isn't supposed to happen.
0 votes Thank Flag Link Mon Feb 15, 2010
Sounds like the $3880 was earnest money made out to the title company up front and just mistakenly not accounted for in the HUD statement, but the rest sounds alittle off. Are you working with an agent who specializes or has some experience in short sales? It makes a difference. Good luck!
Web Reference: http://www.cooperjacobs.com
0 votes Thank Flag Link Sun Feb 14, 2010
There are those who ask the question "Why do I need a Real Estate Agent working for me?"

Can I ask you to pose your question there to answer that question for them?

Next time, use a Real Estate Agent - Buyer Representation is Free here and I believe where you are at and we protect our clients from such events. If you refuse to use an Agent, find a good real estate attorney to help with these issues but get your wallet ready.

Good luck.
0 votes Thank Flag Link Sun Feb 14, 2010
It sounds like a good time to ta;lk with a lawyer.
0 votes Thank Flag Link Sun Feb 14, 2010
Suggest you bring your concerns quickly asking why title company did not follow the written contracts.
I read your docs and without looking at HUD1 many charges are standard fees. Was the title company informed about the HO insurance when the first time was ordered? Appliance repair? Are you talking about buyer pay 1st year home warranty as written on the contract? Did your realtor explain the closing costs and estimate it before escrow?
0 votes Thank Flag Link Sun Feb 14, 2010
Good for you both: I am glad you stood your ground.....There are a lot of strange things going on and requiring payments that are not on the settlement statements are definitely illegal. Good luck to you and your girlfriend and I hope you really enjoy the home.
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Fri Feb 12, 2010
HI Marc,
If you still have the information on a copy of paper, even if it did not go through, you would be wise to let some people know about it.
You should consider contacting
the department of real estate Jeff Davi
the Attorney General Edmund G. Brown Jr.,
The deputy district attorney of your county
even if it got straighten out.
Let them know who the players are
the title company
the escrow company
the lenders for the seller
the listing agent and brokerage firm
the agent representing your Girl Friend and their brokerage ( not to get them into trouble just to help and verify it all
If you send it it with just the explanation you see here, it is a start.
They will understand and they will look into the matter.
This is to save the countless numbers of people that are preyed upon.
I can assure you there is still a problem and somehow they swept it under the carpet.
the lender doing this needs to be caught
the escrow and title company needs to be caught as well.
I cannot say for sure but I would bet the listing agent is probably in on a scheme as well.
Please contact these people to help them watch out for all of us.
Trust me they want to hear from you!

Harold Sharpe
So Cal Homes Realty
(951) 821-8211

http://www.socalhomesrealestate.com
0 votes Thank Flag Link Fri Feb 12, 2010
I everyone,

Thank you for your help. Basically 2 days ago we waked out of the signing because of all the garbage. We gave them a hard NO because what they presented was not what was agreed to. Today they caved in and came up with a clean deal and we went through with it. And this time everything including the $3880 to the second was documented. I appreciate your help and it supports an old saying, "The sale begins when the buyer says NO."
0 votes Thank Flag Link Fri Feb 12, 2010
Marc,
My guess is that the $3880 is being used to pay off the 2nd lender, as part of the short sale, which is allowed, as long as it was disclosed on the HUD and your girlfriend agreed to it. With many short sales, there is a 1st loan and a 2nd loan. Typically, the short sale purchase price does not pay off the 1st loan, leaving nothing for the 2nd loan. But, the 2nd can often be paid by the buyer, directly, so they are getting something out of the sale and agree to release the lien ont he property. All of this is legal, as long as your girlfriend agreed, and it is disclosed on the HUD. It would be disclosed on the buyer side saying something like "Payable to ABC Mortgage".

Talk to the title company and ask them where the money is going. If she wrote the check to the title company for that $3880, they have to put it on the HUD somewhere. Maybe it is on the sellers side of the HUD, which the title compay wrongly did not print for your girlfriend to review.

The $10K she paid to escrow was likely her earnest deposit, as noted in the purchase contract. Does that sound about right?

All of the other fees you highlighted below are normal fees, except the late fee. It is a shame that they were not properly disclosed from the beginning, but nothing looks out of line. For example, the $700 for homeowners insurance is either her owner's title insurance policy, or the first year of her homwoener's insurance being collected through escrow. The home warranty for appliances is not required for her to pay for, and in fact, in most transactions, is coveed by the seller. If she is being asked to pay for it, she does not have to.

It is difficult to know, when you refer to a contract, if you are referring to the purchase contract, or something else. Most of the fees you are referring to would not be in the purchase contract, it would be on the Good Faith Estimate from the lender. I would be happy to review the fees with you if you want a quick sanity check before you hire a lawyer.

Good luck!
Julie Thall
0 votes Thank Flag Link Fri Feb 12, 2010
Marc, I could go on but I won't. Get an attorney and get one fast--one who knows real estate. Use the words "Possible RESPA Violation" when you talk to them.

Good luck.
0 votes Thank Flag Link Fri Feb 12, 2010
Hi Marc, it’s great that you are trying to help your girlfriend out but she should really have addressed all of these concerns with her buyer’s agent. In fact, why hasn’t her buyer’s agent cleared up any of the confusion caused by the closing statement?

Not knowing all the facts present in this transaction I’ll do my best to provide some sort of insight, but the best thing to do if you want to help your girlfriend is to meet with her and her buyer’s agent to discuss any confusion. And if her buyer’s agent doesn’t seem to be much help, then demand to speak to her employing broker.

Now on to the facts presented – first off, any payments to anyone not appearing on the HUD1 (formal closing statement) are technically illegal (unless otherwise advised by a real estate attorney). See this article regarding the short sales tactics of some unscrupulous second lenders - http://www.cnbc.com/id/34877347.

This seems to be what may have happened to the $3880 paid to the second lender. But what I don’t understand is why were these payments made upfront? Anything paid by the buyer towards the purchase (such as her earnest money deposit) should go into the escrow account. And as far as paying additional amounts to the seller’s lenders in order to complete the short sale, this can be a fairly common occurrence and is usually not known until the short payoff negotiation has been finalized with both lenders. Just be cautious when anyone start talking about off HUD payments – seek additional real estate or legal counsel quickly.

Once negotiated, these additional required seller contributions can change but only if the close of escrow has been delayed past the due date set by the seller’s lenders – all of which should have been disclosed to the buyer at time of short sale acceptance. And, any possibility of penalties for not meeting the lender’s due dates should have been discussed prior to closing.

Regarding the other junk fees you bring up (such as doc prep, email, wire, etc) these are all escrow transaction fees and are unavoidable in any transaction. If your girlfriend was receiving purchase financing the all of these fees must have been disclosed or her lender may be on the hook to pay them.

And lastly, why is the buyer paying for a short sale processing fee charged by the seller’s realtor? Was this part of the purchase contract? Go see her buyer’s agent to discuss or see a real estate attorney, especially if she has already made payments that are not reflected in the escrow account. .
0 votes Thank Flag Link Fri Feb 12, 2010
As I understand it - the $3880 was also made out to the title company. At least I know she delivered the check to the title company. But it appears nowhere on the HUD. And it is to pay off the second lender which is also not mentioned on the HUD. It is as if the second lender is being concealed or something.
0 votes Thank Flag Link Thu Feb 11, 2010
Is your friend working with a realtor?

I would suggest having a real estate attorney review the entire transaction...

Usually the local realtor board can recommend several experinced real estate attorneys.

Attorneys are often under appreciated....until you need one.
0 votes Thank Flag Link Thu Feb 11, 2010
Marc: Payments made directly to lenders and are off of the final "Hud Statement", are illegal. Where's your girlfriends buyer's agent? Forget the buyer's agent have a real estate attorney review this complicated transaction!
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Thu Feb 11, 2010
I can tell you some of it.

The lender for some reason decided to add a 1% fee that's not in the contract. $1829
They threw in a late penalty $500 - not agreed to
She agreed to pay $990 for a short sale processing fee but they added another $500 they call a transaction fee. (Sellars relator)
They added $300 for apliance insurance that was never discussed and not needed.
There are 2 lenders, but no where in the closing papers is the second lender mentioned. Nor do they mention anywhere a second escrow payment of $3880. It's like it's an undocumented side deal.
There was a $700 charge for home owners insurance even though she already bought it.
Something called TDB for Accomsignoff ??? What's that?
Email doc fee $75.00
Load tie in fee $150
Doc prep feee $50
Outside Courier/special messanger $$60

The thing that really sticks out in my mind is that there are no docs referencing the $3880 she escrowed.
0 votes Thank Flag Link Thu Feb 11, 2010
Hi Marc,
It would be difficult to answer your questions without looking at the documents. There are recent changes to the HUD1 that should make it easy for you to understand all the charges, because these changes are new not everyone understand how to work with the new changes. I am sure if you complain they will adjust the charges. Did you have a realtor represent you on this transaction? If you do please have him/her look into helping you work it out. Good luck

Mike
0 votes Thank Flag Link Thu Feb 11, 2010
Hi Marc, Short sales are weird. Kinda have to like it a little. I would hope your friends Realtor has the answers to these short sale closing questions. I don't know what the final negotiation addressed ,so there is no way to clear up weird.

I will say, money paid out of escrow (poe) or (poc) is not uncommon, however lien holders are not allowed to ask for funds to be POE anymore.

I guess you got the bogus charges thing handled. The terms you are referring to must be the contract terms. The loan terms will usually change from the day her offer was accepted and the 7 day disclosure period.

If your friend's Realtor does not have the answers....Quickly start the legal process..arbitration etc.

Michael
http://LosGatosHomesandRealEstateBlog
0 votes Thank Flag Link Thu Feb 11, 2010
She paid earnest money deposit directly to the lenders? Usually (as you experienced) the earnest money is made payable to the escrow holder - no one else.

The escrow / title company is responsible for collecting the contractual documents and disbursing the funds according to contract. The escrow / title company is a neutral third party so if they have a disagreement they will close the file and ask the seller and buyer (their agents) to submit mutually agreed to instructions.

You said you read her contract, and there were terms in it she didn't agree to. Then it is not a contract if she didn't sign it. If she signed it she agreed to it, whether she understood or not.

This would be the time to get the lender, agents, their brokers and perhaps a real estate attorney involved and reviewing what happened.

It does sound like a huge mis-communication. The way short sales work is that the first will agree to certain terms, including what the second is to receive and then the second has to agree as well. Those agreements come after the Title / Escrow prepare an estimated HUD for the Lenders. Then the will submit in writing their approval. Did your girlfriend see the written approval from the lenders? She could also have asked for the HUD.

As Arn said where the discrepancy lies is important. Find her cashed checks and trace that.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Thu Feb 11, 2010
Mark,
It's great that she has someone supporting her in this but the resolution needs to be explained by a combination of the Escrow Officer and her Agent.
Be careful when comparing your REO deal with a short sale. They have nothing in common. An REO sale has just one brave buyer and a motivated seller. A short sale is vastly more complicated with multiple players and a far more complex process.
My best advice is to hold the person responsible for this (Her Agent) to account. If no acceptable explanation is forthcoming then cut and run and find a capable agent for her next attempt.
Please understand, this should not be a reason to ignore short sales, simply a warning to make sure you are working with an Agent who understands how they work.
The Golden Rule for professional Realtors is "NO SURPRISES AT THE SIGN OFF".
Good luck, Bill
0 votes Thank Flag Link Thu Feb 11, 2010
Hi Marc

OK....complicated situation, no doubt!
I think your first step would be to isolate the "$10K higher than expected" came from?

You need to separate out and isolate the various costs:

some go to title company, were those fees higher than expected?
some goes to lender, were loan fees higher than expected?
if these two above are the case, then you should ask the title company and lender to explain their fees and explain why they were higher than first estimated.

some of the "$10K higher than expected" may be due to something involving the short sale.
is this the $10K EXTRA you did not anticipate?

payments outside escrow and off the HUD are generally bad news!
i believe government regulatory agenices are looking at this issue now.
on a certain level, it may be fraud.
the payment to the second lender is get "off the books" so the first lender does not know about it.
again, not good.

yes, everyone should try to remain calm.
ask the questions. get the answers. sort things out. and then decide.

let me know if i can help.

Arn
0 votes Thank Flag Link Thu Feb 11, 2010
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