my son made an offer on a home that was accepted by B of A. B of A then came back and claimed they made a mistake and the law would not allow the

Asked by Jb, Tucson, AZ Wed Jul 7, 2010

offer. My son modified his offer to be in line with the law and B of A now is claiming they will not acceot a F?HA loan, Cash sale only> Is this legal?

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7
Ric Mills, Agent, Oro Valley, AZ
Fri Dec 28, 2012
Unfortunately they can probably change what ever they want at any time. The change to cash is probably, as you have seen, a repair or condition question. The Bank doesn't want to tie up the property only to see the deal fall apart. They now realize they need to go for cash to ensure a sale. If you can do cash(at probably a lesser price) and then fix the home up and then mortgage it. You could probably save a lot. Cash is still King in the housing industry. Good Luck.
0 votes
Pass FHA, , Los Angeles, CA
Sun Jul 11, 2010
The "law" you are referring to is likely the property condition standards for FHA financing. Even though you are approved for FHA financing does not mean the house you write an offer on will pass FHA property conditions. Often is the case where someone enters escrow with an approved an offer only to find out the house does not meet the standards for FHA financing AFTER the house is appraised and inspected. Certain repairs must be performed to bring the house into compliance. Those repairs can vary in scope of work and dollars spent. The homeowner can decide not to make the repairs and leave the FHA offer on the table based on contingency of repairs made under a FHA 203K or 203K streamline loan or decide to accept cash offers or traditional financing only where the loan conditions can be met under the current property conditions.
Web Reference:  http://passfha.com
0 votes
Susan B Colu…, Agent, Port Saint Lucie, FL
Sat Jul 10, 2010
The question is, was it accepted and signed.? Although now, that he has modified his offer, it might be a mute point. The lender probably has standards that they must comply with. Keep in mind also that you are dealing with a very large bank, which has huge departments. FHA loans can be a bit more tricky, due to possible repair issue's and if your market area has a great deal of cash, the lender will always prefer cash. Some area's, like where I am in Florida have a shortage of good listings at the moment (lots of inventory in the pipeline though with foreclosures and short sales), so the Cash buyers and investors almost always are able to grab the good properties over a FHA buyer. In addition when I have listings that need a great deal of work, my lenders want CASH. They just don't want to get tied up due to repair issue's. This won't last forever though, but for right now the cash buyers win out. The lender has the right to accept or not accept a offer. Short Sales are subject to third party approval and that is the approval of the lender. I hope this explains it a bit for you.
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James Gordon…, Agent, Hamilton, OH
Thu Jul 8, 2010
Jb if mthere are repair issues the property may not conform to FHA 2036b guidelines. I have had buyers be successful making an offer with FHA 203k financing on "cash only" properties. The lender needs to agree becasue on a cash transaction they expect a 5 close on a 203k it will take at leaset 45 days.
0 votes
Thom Colby, Agent, Irvine, CA
Wed Jul 7, 2010
Consult with your REALTOR - it is likely an FHA conformity issue.

Best of luck,

Thom Colby
Broker / Owner
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We never double-end a transaction in our brokerage.
888-391-5245 Direct Cell
0 votes
Dan Chase, Home Buyer, Texas City, TX
Wed Jul 7, 2010
It is very possible that the house will not pass FHA requirements.

is it legal? Ask a real estate lawyer. I would think that an accepted contract is binding.
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Dallas Texas, Agent, Dallas, TN
Wed Jul 7, 2010
Sure if seller will not accept FHA loan cash offer then they can do what they please

Confer with statues of the state of where home is located and speak with an attorney.

Your buyers agent is resource of what is correct

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
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