Asked by Bill, American Canyon, CA • Wed Sep 3, 2008
We signed our loan documents on 9/2 to on our CA single family home, to close on 9/8. It is a short sale which we have a purchase agreement signed by the seller, and approved by their first (Citibank) and their second (Citibank too). Today my RE broker received a demand from the holder of the first for $5600 for unpaid homeowners insurance on the property. The seller had stopped paying their insurance as of 1/1/08 so Citibank claims they took out a policy on the property and demands that it be cleared before escrow can close. I just finished insuring the same property for $765 so they want 7 times market rate or almost 1% of the homes value for nothing. They refuse to pay, and the second refuses to pay. The seller could care less. They claim they will foreclose the property on 9/9 instead of completing the sale if the bill goes unpaid. None of this was ever disclosed to me until today. Do I have a binding contract? Should I tell them the bill is their problem?
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