Hi Hopeful,
To answer your question directly, YES both your agent and the listing agent should have known there was no written approval. When you say you were supposed to close tomorrow, do you mean you have loan documents signed or is that just the estimate of when your agent thought you would close? I know every lender must have written approval of the short sale acceptance before loan docs are ordered. Many lenders won't even do the apprasial before the short sale is approved in writing. I suggest you call your lender direclty. He or she will know where they are and then can at least give you a time frame from the day written approval has been provided. Usually it is about 2 weeks after written approval is given to your new lender that you would close. Once the lender has approval they get the apprasial which takes about 5 days and then submit to the underwriter about 4 days; draw loan docs and then close. Docs and closing can take 3-4 days in Riverside county. I believe you are a little further away from closing than you may think.
You have gone this far, hang in there. Best of luck to you.
Connie Bramble
714-337-8718

That's a Double Yikes!

The listing agent should NEVER have let you get so far as to be closing without having ever had a written approval on the 2nd lien. That's not good, not good at all.

I have quite a few short sale files right now, and I always keep all parties informed as to where we stand. I have many files where we're waiting on that darned 2nd approval letter IN WRITING.

As long as the listing agent faxes over to the 2nd lien holder that she/he does in fact have approval on the 1st & the ball is only in the 2nd banks court & everyone is waiting on them, you should be fine. Of course it's never guaranteed that the 2nd will want more than the 1st is offering them. It's possible they will ask for more. Depending on your own situation with where you're living now & when you need to move & how close this home is to going to an auction, your listing agent should fight the 2nd on demanding more than $3k.

emilyknell1@yahoo.com

Goodness...seems like both your agent as well as the listing agent missed the critical document: written acceptance and approval from ALL lenders.

Then again, how did your lender miss that, too? Your lender will always require a ratified contract, and unless it is signed by both parties, they won't move forward with the loan application.

Did you have a short sale addendum that states your escrow begins upon receipt of thatapproval, and that your initial deposit isn't cashed until then?

Dear Hopeful:

You poor thing ... welcome to the world of short sales. You can see why so many get frustrated with the process. The one rule is: it isn't closed 'till it's closed ... ESPECIALLY with a short sale.

Yes, written approvals and lien releases from all lienholders are required. Why it wasn't in writing, I can't speculate. Your agent may not have known that the approval wasn't written. It's all in the question ... if the question 'do you have approval from the 2nd?' was asked, there's no way to know it isn't written unless that's specified, because the answer you will receive is 'Yes.'

Don't panic just yet. If your loan has funded or is within a day of funding, it's unlikely (though not technically impossible) that the 1st lender will foreclose or call the deal off, or that the second lender will walk away from the funds it negotiated to receive in the short sale.

Keep communicating with your agent and I'm sure your agent will keep communicating with the seller's agent.

How long you'll have to wait for the written approval depends on the lienholder, their representative and their workload. It *shouldn't* take long at all, but with the majority of short sales, predicting timeframes is risky business.

Hang in there ... you're REALLY at the very end now.

ANGIE

Yes a written approval must be provided. Also the first Mortgagee asks for the written approval from the second mortgagee in order to give their approval. If the approval from the second is still active and did not expire yet then there should be no problem to get in in writting. My advise to you is your agent or the listing agent whom ever is working the short sale should ask for an extension from the first mortgagee to enable the second to issue a written approval. Everything is possible if the people involved are willing to take charge and get things done.
Good Luck to you.
Please let me know how it went.

On Your Team.
Irena Popilevsky