Home Buying in 90245>Question Details

Korie, Home Buyer in Torrance, CA

We signed the contract on the 6th it's foreclosure. the bank has not sign the contract why?

Asked by Korie, Torrance, CA Sat Mar 10, 2012

we were told by the agent that they don't want an FHA loan, we changed to conventional and they haven't sign them, they also want to closed escrow on the 5th of April.

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Tim Moore’s answer
Sounds like you are dealing with a bank owned home or REO property. Banks own these once the foreclosure is over and they can be full of demands and short on replies or cooperation. One problem is the bank is a large top heavy business with people that work at their own pace and only 5 days a week. I have found that once they do decide to accept an offer they put crazy demands on the buyer like closing in 30 days, 7-10 day inspection periods and AS-IS. They will bend a little on the closing date if the date they want comes and your loan is close but not yet ready. Your agent just needs to stay on top of the situation which can be frustrating. good luck
1 vote Thank Flag Link Sun Mar 11, 2012
BEST ANSWER
Just so you know, unless there are items about the house that won't allow an FHA loan, the REO bank can't just say "We don't want a buyer with an FHA loan". Although you've now made your contracts to reflect that you're getting Conventional financing, you may find through a home inspection or by contacting your loan broker for a possible 'site visit' that you can in fact still get the FHA financing with the lower down payment.

You could also talk to your loan broker about obtaining FHA 203K rehab financing, if the home is in need of repair.

Shoot me an email if you want to talk about this some more. I don't look back on this same Trulia thread for answers posted after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtor
0 votes Thank Flag Link Sun Mar 11, 2012
The bank, most likely, does not want an FHA loan because the bank believes that the FHA appraiser is going to ask for many health and safety issues to be repaired. That being said, a conventional appraiser may ask for glaring health and safery issues to be addressed, as well.
Banks are slooooooooooooooooow!
They do not work weekends, like all the rest of us on Trulia do!!
The bank has no emotional attachment to the transaction. The transaction sits on a desk in a stack and is dealt with when it hits the top of the pile.
I have a current transaction where the offer was accepted on the Feb 25th. The fully executed contract took over 2 weeks to receive back from the bank.
The buyer was not asked to provide earnest money deposit for 3 whole weeks.
I had another where the foreclosing lender could not find the Trustee's Deed for a month. The transaction was delayed closing for 4 weeks. The rate lock had to be extended, etc.
These transactions are not for the faint at heart!
This is why "Traditional" sale properties sell first and sell higher.
Hang in there. On a foreclosure you will close. It will be hurry up and wait, but you will close within 45-60 days from acceptance.
Short sale? Whole 'nother story!! Could be months and months and months.
Your professional agent will know which short selling real estate agents can perform on the short sale close for you.
0 votes Thank Flag Link Fri Mar 16, 2012
Maybe I am missing something. Is this a Short Sale? That may explain some of the delays. Are you using a Realtor to represent you (as the buyer)? What is his explanation?
If you need a second opinion, feel free to call me. I am a local Torrance broker and I would be happy to answer your questions.

Michael Magaw
310.259.6850
0 votes Thank Flag Link Sun Mar 11, 2012
Korie,

As mentioned below, you will get a seller addendum that you will need to sign to proceed. And sometimes it can take weeks till you actually have all the paperwork, and regardless of what the agent might say, you don't have a deal till everything is signed.

One other thing you need to know about foreclosures, you cannot bank on contractual timelines. Some asset managers are on it, some aren't, so you need to get much further along before making ANY plans.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Sun Mar 11, 2012
On REO's there will be no one at the Bank who will sign the Contract:
They are a beauracracy, a conglomeration corporation and no one will put their name on a document that could come back and bite them on the butt.
You and the Title Company willo work through that; you should be Okay.
Trust me, I'll put my signature on that.
0 votes Thank Flag Link Sun Mar 11, 2012
The 6th was last Tuesday, you only mention when you signed the offer, nothing about when the bank received it. If you signed it late Tuesday, your Realtor got it to the bank’s Realtor on Wednesday and the bank didn’t get it until late that afternoon or Thursday then only one or two working days have past. That is not a long time on an REO, in fact a week in their possession is not unusual. Nothing in your question about the price either, if you low balled the offer they may never respond. It kind of goes with the turf of REO’s. Might want to check out the info on buying an REO linked belwo, good luck,
0 votes Thank Flag Link Sun Mar 11, 2012
Hi Korie,
I am assuming this is a REO property. If the bank accepts your offer they will send you a bank addendum to the contract that you need to sign and send back before the bank will execute the contract. If you do not get an addendum from the bank, your offer was, more than likely, not accepted. Make sure you read and understand the addendum before moving forward.
Good luck,
0 votes Thank Flag Link Sun Mar 11, 2012
I would call your agent and see if they can find out what's going on. When dealing with a foreclosure it can sometimes take a long time to get answers. If they want to close by the 5th of April make sure that the lender you are working with can make that deadline and if they can't make sure the bank that owns the property knows that and will agree to a later closing date.
0 votes Thank Flag Link Sat Mar 10, 2012
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