Foreclosure in Oregon>Question Details

Stitch's Mom, Home Buyer in Oregon

Can the bank still back out?

Asked by Stitch's Mom, Oregon Wed Feb 27, 2008

I am trying to purchase a house on a short sale. The house was listed at 149K, 185K was owed, only one lender. We offered 120K and were accepted by the seller contingent on lender approval, waited five weeks and and then lender countered with 143K. We accepted the 143K, signed an adendum that showed price change. Seller also signed. Realtor told me it was a done deal, we were just waiting on the title company to close. Come to find out we have nothing in writing from the lender accepting the 143K. The title company says they're waiting on the lender. It has been 3 weeks since we signed the counter. Should I be getting worried? When I try to ask my agent what is going on he just smiles and says "we should close in a day or two", "don't worry its a done deal". Am I right? Can the bank back out at any moment? also, the bank has already canceled two auction dates and has stopped Forclosure procedings.

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The bank can always turn a loan down. I have had it happen. Just ask a lot of questions.
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0 votes Thank Flag Link Tue Apr 22, 2008
Just thought I should update. We closed on the house March 4 for the original agreed upon price. It was a long stressful wait but it payed off. Thanks for all of your help!
0 votes Thank Flag Link Sun Mar 30, 2008
Disclaimer: This is not meant as a solicitation for business as you have Representation for this sale; I am answering a general question, this is basic short sale information available from your realtor as well.

A bank doesn't follow realtor rules; they usually put nothing in writing until they are ready to close. If they didn't issue you a counter offer in writing (I'd be surprised if they did) then you have no deal. Anyone else can make an offer to purchase that property if there's no mutually agreed upon deal in writing, that's why banks don't hurry with anything in Short Sales. (they are anything but SHORT)

My experience is that banks try to get the price up verbally and relay that info (suggest a higher price verbally as a matter of course) but are in no way committed to that; if another better written offer comes to them. That's how they keep you on the hook..hoping, yet with no witten guarantee . You need to be happy with YOUR decisions to stay in it no matter how long it takes; if not then you'll move on to something else.

The fact that they changed the auction dates twice is not unusual in this market either. I had that happen to a deal I had for 5 months of waiting before my folks backed out from the deal; that property was supposed to go on the block, but didn't..that was 4 months ago and is still for sale as a short sale. Not fun! Best of decisions to you!
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0 votes Thank Flag Link Thu Mar 27, 2008
I would contact the title company first. The bank isn't allowed to speak to you unless the seller has given them written permission.
0 votes Thank Flag Link Wed Feb 27, 2008
Should I try to contact the lender myself and see what the hold up is? Or should I contactact the title company?
0 votes Thank Flag Link Wed Feb 27, 2008
I haven't dealt with Accubank before but it seems that if the bank requested the offer be changed to $143k and you and the seller signed then that would be your contract. A lot of times the banks want to see a preliminary HUD 1 from the title company before going forward. This information on the HUD 1 tells the bank how much it will net.
0 votes Thank Flag Link Wed Feb 27, 2008
Its an all cash offer and yes we have had our earnest money in place since we made the offer. I am not sure what you mean by hazard insurance? Do you mean fire/homeowners insurance? If yes, that is all in place through the title company. The lender/bank is AccuBanc, a division of First American Mortgage of Indiana.
0 votes Thank Flag Link Wed Feb 27, 2008
Not usually but all banks are different. I've done several short sales and all have been communicated through e-mail. The bank will accept the contract based upon approval from your lender. Has the bank received a lender approval, hazard insurance, earnest money deposit, etc.?
0 votes Thank Flag Link Wed Feb 27, 2008
Thank you for your quick response. My agent says all they have is a verbal ok from the bank. He says that we won't get anything in writing until we close. Is this normal?
0 votes Thank Flag Link Wed Feb 27, 2008
If the bank has already canceled two auction dates and stopped the proceedings you should be o.k. You need to ask your agent for the approval from the bank accepting the $143k. It is all done through e-mail so it should be easy to get.
0 votes Thank Flag Link Wed Feb 27, 2008
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