Home Buying in Chatsworth>Question Details

l8more, Home Buyer in Chatsworth, CA

We were told we are closing in less than 15 days, yet no approal letter in hand?

Asked by l8more, Chatsworth, CA Fri Nov 2, 2012

We have been involved in a shortsale for over 3 months, have all the preliminary stuff done, inspection, appraisal, signed contracts, preliminary documents and disclosures etc..... but now that our loan person is ready to get loan docs. ready, we find out that we are still waiting for our official approval letter, according to our agent she has seen it but does not have it, ( I guess an e-mail version of it) Now we are just sitting with our bags packed not knowing if this is for real? Any experience, is this really normal?

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The banks take a very long time to get the approval letter out, especially if they are out of the country. We have been in a short sale deal here in Chatsworth where the buyer is paying cash & the bank is in India. They have to make appointments with us in order to discuss the file. It is ridiculous seeing we have all the paperwork in, the buyer is paying cash, the bank loses paperwork, etc & it has been 1 month w/ no approval yet. Have you opened escrow yet?
0 votes Thank Flag Link Mon Nov 5, 2012
yes, I opened escrow, got all the prelim. stuff and afidavits to sign etc.... they cashed my deposit (escrow did) I just have yet to find out abou the approval letter, I am so confused, how could we do all this without having some type of approval first?
Flag Mon Nov 5, 2012
You most likely have a "Short Sale Addendum" to your Purchase Contract, this addendum makes it so the listing agent MUST turn over to your agent & on to you a copy of the Short Sale Approval letter normally within 1-3 business days of the listing agent receiving it. You should not have done appraisals, inspections & all that jazz without being 1000% sure you actually had short sale approval from the lien holder(s).

So, RIGHT NOW, you call up the listing agent or your agent yourself & say "I want a copy of the short sale approval letter, please email it to me today".

I don't agree with one of the other answers here that "banks are sometimes not issuing an approval in writing until days before closing" , that's a bunch of hogwash. If one exists you should be able to print it out & hold it in your hands.

Along with a short sale approval letter you may also be receiving a paper to sign off on that is an "Arm's Length Affidavit" from the lien holder(s) & this usually is attached to the Approval letter, unless you already signed off on one of these earlier in the short sale process prior to the actual approval letter being issued.

Shoot me an email so we can talk about this some more, I don't look back on this same Trulia posting for answers after mine.

Emily S. Knell
EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Realty ONE Group
100% short sale success ratio
& I can Prove it
0 votes Thank Flag Link Sun Nov 4, 2012
From your perspective this is not something that makes you think this is going to happen but this is not out of the ordinary. In some cases, the approval letter isn't obtained until just prior to closing. Unless there is some type of unexpected problem that doesn't get identified until the 11th hour you should be fine.
0 votes Thank Flag Link Sat Nov 3, 2012
You just have to have some patience , sometimes it takes a little bit of time for bank to issue final short sale approval.

And they do need to issue it right next to the close of escrow as escrow need to supply final HUD/estimates for the bank review.

Hope this info will help you.

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0 votes Thank Flag Link Sat Nov 3, 2012
Okay, lets see if i can get a answer, are you talking about approval letter from the short sale bank, Then your agent needs to request it, and if she has it in a email, and cant find it. she can request the short sale negotiator to send another to give to the lender , that is what your bank is waiting for correct. Your agent needs to be intouch with the short sale bank and get that letter. Diane
I think you okay, good luck with the new home, you will be in shortly.
0 votes Thank Flag Link Fri Nov 2, 2012
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