Instead of filing complaints and going to attorney,s negative action, see if the seller can wait for the 90 days. If not the lender should have known and told you about that requirement. The real estate agent did not give you the loan..
HUD announced in Feb 2010 the FHA 90-day anti-flipping rule would be suspended for one year. See
http://portal.hud.gov/portal/page/portal/HUD/press/press_rel As far as I can determine, that is still the HUD/FHA guideline.
Banks are still selling Bank owned property requiring the old language and putting a deed restriction of 90-days. Lenders may or may not have their own anti-flipping lending "rule" in addition to HUD/FHA rules. Remember that lenders can add more conditions to FHA and any other loans they write. With other government backed loanswe see added conditions by the lenders all the time.
I see two issues. 1) The lender should have explained their 90-day rule up front. The agent is not the lender and does not have the role or responsibility. On the other hand an LSR is not a firm contract to lend, only a poor promise to consider a loan. Loans don't always close.
2) As the buyer, you waived the loan contingency and appraisal by contract.-We cannot speak to what was said between you and your agent when the contingency waiver questions arose. I would hope you were cautioned about the risk, but in the end it was your decision (the buyer's) which you ratified by signing the contingency waiver or striking that clause. As agents we recommend, you make the final decision. By that waiver, contractually you agreed to come to closing with cash (not a loan) and agreed to pay the agreed price no matter what the appraisal. Risky , but your choice. Failure to close has the penalty of forfeiting your earnest money.
Have you contacted the agent's Designated Real Estate Broker (your agent's boss) and the Mortgage Broker (your loan officer's boss) to sit down face to face and discuss the situation.
Obviously I'm basing this on your information and is in no way an intent to give any type of legal advice.
Best of luck!
The reason the investor was trying to make the contract not contingent upon appraisal or financing because he was well aware of this 90 day rule. Your realtor should have known about this rule and advised you not to accept the contingencies. Since the contract was not contingent on financing, then you would be out the $2,000 if you can't close the transaction. Give my lender a call and he should be able to help. I wish you the best of luck.
Find another lender that will do the deal for you (Some will)
Talk to your agents Broker
Get an attorney
File a Code of Ethics complaint with the Local Association
File a complaint with the Arizona Department of Real Estate
Just a few options for you to consider.
Sorry to hear of your unfortunate situation, as Realtors we can not give legal advice,
Are you sure that the only reason you could not get this loan is because the seller had not owned the property for more than 90 days? I am surprised that the foreclosure happened so quickly given the sellers owned it less than 90 days. You did mention you had a short sale previously. Did your short sale occur at least three years ago? Without extenuating circumstances, there is a 3-year waiting period before you can buy again using FHA financing. The waiting period is only two years with a conventional loan & 20% down. This is also your lender's responsibility to know.
Many lenders add additional layers of guidelines above & beyond FHA guidelines. I have one particular listing agent who specializes in flips who calls me on a regular basis to help with financing a loan on her flipped properties, owned less than 90 days, and where the purchase price is greater than 20% of seller's purchase price because the buyer's lender will not fund this type of transaction.
Did you use a licensed loan originator? Loan originators who work for the big national banks are not required to be licensed, so they do not have to take the mandatory 20-hour classes or pass the national & state tests to originate loans. You can find out if your loan originator was licensed by checking here: http://www.nmlsconsumeraccess.org.
As far as the real estate questions, I think Stephanie Weiss does a good job of "voicing" her thoughts.
When you do start this home buying process again, may I suggest the following? Find a Licensed Loan Originator with experience, who works for a Mortgage Bank that is a direct lender & will originate, process, underwrite & fund your loan, all â€œin-house.â€ A bank only has their products & guidelines which you have found, may not be beneficial to you, while a Mortgage Bank has many sources of loans, depending upon the situation. While there are good mortgage brokers, they can not keep control of your loan because they find the lender for you & then ship your loan & paperwork to that lender. You may need a longer of time to close your loan in this circumstance, plus watch out for all the fees charged.
Is the $2,000 you lost all attributed to your earnest money deposit? Please seek legal advice, & you might ask that since this was an FHA loan & was identified as such on the LSR, in your FHA paperwork, you have a form called the â€œAmendatory Clauseâ€ that â€œis intended to ensure that prospective home buyers with FHA-backed loans receive important information in a timely manner about the house to be purchased. In particular, the Amendatory Clause stipulates that if buyers have not received information about the appraised value of the home they intend to buy, the buyers are not obligated to purchase the home.â€
For your protection, the FHA Amendatory Clause â€œprotects buyers by stipulating that if the required appraisal information is not delivered per the terms of the clause, buyers shall not be required to forfeit earnest money they have deposited for a house if they elect not to buy the house.â€ Again, check with a real estate attorney on this.
If I can help you with any questions you may have, please feel free to give me a call.
Good luck & all the best,
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund our own loans, on time. NMLS ID 263779 | AZ BK 0903725
Even though your agent doesn't sound very experienced, she doesn't control the banks decision re: their lending practices so the main issue that I see is why your lender waited so long to come back and say they would not lend in this situation. Both you & they should have received a preliminary report from the title company within a few days of entering escrow (as part of the seller disclosures) so they should have been able to tell you early on that this sale did not meet their underwriters guidelines in time for you to use your inspection contingency period to back out of escrow & receive your deposit back.
How long has it been since you completed your short sale? If it has been less than 2 years, that is a more likely reason that you were not able to find another lender to do the loan since FHA suspended its 90 Day Flip Rule on February 1, 2010 for a period of 12 months (though lenders could possibly still use it as their own company guideline when underwriting).
Lenders will also look at how much the seller of a flip is profiting on the transaction and if it exceeds a certain percentage (usually 20% above the acquisition costs) that would also preclude an FHA loan.
With out actually seeing your contract, it would be hard for any of us to give you a good answer but I would recommend that you speak to your agents broker and if that doesn't give you any closure you could then speak to an attorney.
Best of luck to you,
I agree that you should consider talking the agent's broker and also an attorney. You might also want to check out this link http://portal.hud.gov/portal/page/portal/HUD/press/press_rel This is a HUD web page regarding the conditions for the current 90 day flip rule waiver. I wish you luck.
As for the appraisal contingency, since you chose to come to a new agreement with the seller, there is no recourse to cancel due to the home not appraising.
FHA does allow for flipping a home in under 90 days, it's just that different requirements need to be met. You might consider trying a different lender that will do FHA flips under 90 days, they are out there.
Do you have a Realtor representing you?