Home Buying in Oceanside>Question Details

Sj, Home Buyer in San Diego, CA

Is it typical for REO banks to not respond?

Asked by Sj, San Diego, CA Tue Nov 11, 2008

Is it typical for REO banks to not respond to an extension for escrow till after the escrow deadline has passed? Escrow was to be closed on the 10th of Nov and the file for extension was sent on the 4th of Nov due to the expectation that our lender delayed in delivering the loan docs to escrow. The loan docs were expected to be delivered on the 3rd, but were not actually delivered till the 7th due to a delay from the lender. We asked for an extension plus per diems to be waived since the delay was not caused by us but the lender. We have not heard back from the REO and are wondering 2 things. Are they planning to back out? And will they approve the waiver as we gave notice early of the problems with our lender delay (missing appraisal signatures, etc.). My husband is starting to get cold feet due to the number of delays/obstacles it has taken to close this deal and thinks it is a sign. Anything to ease his fears is welcomed!

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The lack of response fromt he bank is normal. The banks, listing agents, and asset managers are often overloaded with work and the emotions of the buyer are the last thing from their minds. Have your agent stand firm on waiving the per diem, and have them push to get a signature. I'm sure the bank doesn't want to lose you as a buyer, and taking your deposit doesn't serve their goal of getting the home off their books.

On a recent REO deal, I had to call Freddie Mac directly to get a signature even though I was representing the buyer because the listing agent wouldn't do anything but tell us to wait(everyday for two weeks waiting to close gets a bit old) and escrow didn't have the right contact people. The next day after my phone call and we got the document and were able to close.

If it's any consolation, your closing later in the month will mean less closing costs for you(less property taxes and prepaid interest).

Good luck,
Tony
0 votes Thank Flag Link Tue Nov 11, 2008
They probably are nt planning on backing out. They may charge you the per diam. I would have your agent work on that. Most banks will wave them, if you give them enough notice. I would not take anything as a negative sign if you like the house.

Remember, the banks view it...if at all...as just business as usual.

Good luck,
Joan Wilson Realtor
Prudential
760-757-3468
0 votes Thank Flag Link Mon May 18, 2009
SJ,

Banks can be a little slow on responses or provide none at all. This unfortunately happens but if you are with an agent experienced with the REO LISTING side of the transaction, your headaches will be all but eliminated because they will be able to clearly communicate timelines and procedures in the bank world.

As for waiving the per diem, this is completely subjective depending on the selling Bank. In this case the per diem should not be waived because the delay was caused by "your" lender. In many cases the seller requests you use their preferred lender. If you did this, most likely the extension will be granted with no per diem, if you did not do this, chances are you will still get the extension but will be hit with the per diem fees.

The advice I saw below about having your agent "stand firm" may end up hurting you. The reality is you violated the terms of the contract. The best defense to this would have been a good offense when the contract was first being negotiated. Should they ask for it to be waived???? Absolutely, but how they go about doing this can make all the difference.

Another thing not mentioned is your deposit. If you end up "standing firm" then you run the chance of losing the home and losing your deposit. Your contingency period most likely expired and thus your deposit is live.

What we typically see is the lender paying for the per diem not the buyer. Again this does need to be negotiated but a good agent can help you in this area as well.

We have closed over 100 bank deals in the last year working on the listing side and buying side, I see a lot of mis-information out there.
0 votes Thank Flag Link Fri Jan 9, 2009
Hi SJ,

Unfortunately, the lender is on your side of the transaction so he needs to make sure things are done in a timely manner so you dont get stuck with per diem fees. Most of the time the bank will allow one extension without fees. If you need to extend again they may want to charge the entire per diem. I had a transaction that went 32 days over. We were able to negotiate the per diem be only $900 instead of $3200 (100 per day with some banks). If they havent answered yet its most likely that the listing agent hasnt received a response. I would have your agent call the listing agent at least twice a day to get an answer. Sometimes these listing agents with REOs have so many that they cant keep track of it all and if they dont have assistants with a good work ethic you get stuck playing the waiting game.

Since I just noticed the date on your posting, I hope everything closed already.

Happy New Year,

Claudia Morales, ABR
Century 21 Fairway Realty
c21morales@gmail.com
0 votes Thank Flag Link Thu Jan 8, 2009
Sj,
Your best bet is not to get stressed out. COntact your agent and let then work it out. There is always an answer ( not always the one we want). These delays do happen frquently.
Banks want to sell the home they have in inventory so just hang in there.
Bank are quite overwhelmed with the amount of deals thay have so it is not uncommon to experience delays.
Good Luck
Rick.
0 votes Thank Flag Link Tue Nov 11, 2008
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