Reasons for rescission of N.O.D. ?

Asked by Kathy, San Bernardino County, CA Sat Jan 17, 2009

We are involved in a short sale on a preforeclosure. A superior offer was accepted over our offer and fell out of escrow 1 week before it was due to be advertised to go to trustee sale.A notice of rescission was filed at the county assessor sometime before or after it fell out of escrow.What other reasons for the notice of rescission of nod would there be besides the owner curing the default?Will the bank have to start the foreclosure process over from the beginning the full 121 days? With the payments possibly being caught up on the home won't there be less motivation for the bank to short sale it?We have been involved in this short sale for 6 months! Bank of America!! Some websites I go to make it sound like the prospective owners are calling the banks for the status of the short sale home they are trying to buy, bank of America will not discuss it with us without the owners permission even though the loan number and loan information is public information. Is this common? Thanks!!

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gabriel palo…, Agent, Pompano Beach, FL
Mon Jul 11, 2011
Third party approval is the clincher. Seller to buyer and bank to seller.
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Diane Wheatl…, Agent, Upland, CA
Sun Jan 18, 2009
I would not get my hopes up on this home purchase, at least not in the near future. The seller most likely filed a motion to halt the foreclosure sale due to their right of rescission as per RESPA guidelines. You will see this happening more and more. The owner of the property had a complete loan audit or Truth in Lending (TILA) audit performed and found violations as per RESPA regulations which would halt any further foreclosure proceedings until the violation is deemed valid or not in a court of law.

This can be a lengthy process depending upon who the lender is and if the trustee who filed the NOD has the legal right to pursue a trustee sale through due process of law. This seller is obviously making a stand to save their home in whatever manner or method possible. It would be best to move on to another home and save yourself the frustration of waiting, not understanding the strategy of the homeowner with regards to the court proceedings, etc.

I'm sorry you put 6 months worth of your time into this home already. The listing agent should have had some idea that the owner was attempting to postpone the foreclosure proceedings by using this tactic. But, maybe not. And finally, it is virtually impossible for you to gain access to the current owner's loan information and status from the lender directly without written permission from the seller. You can contact the trustee listed on the recorded notice of default filed at the county recorder's office for more information on the status of the foreclosure proceedings including any scheduled sale date, postponements and bid amounts. This is all public record and available to you.

Contact your Realtor to request any and all documentation related to the default and foreclosure proceedings recorded with the county. That would be your quickest way to see written, reliable documentation on the situation. If not through your Realtor then you can obtain these documents from the San Bernardino County Recorder's Office in person for a minimal fee.

Best of luck!!

Diane Wheatley, Broker
Move Up Properties Real Estate Brokerage, Rancho Cucamonga
(909) 981-5589
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Linda Slocum,…, , Santa Clarita, CA
Sun Jan 18, 2009
The banks have no authority to talk to anyone other than the current borrowers (homeowners) and those they have approved in writing as having authority to discuss their loan situation. Anything else would be an invasion of privacy, and could possibly open the door for all sorts of illegal activities.

The bank is not obligated to sell the home to you or anyone else as a short sale. In a short sale, the current owners are the sellers, and they are working with the bank to accept less money than they currently owe.

Many homeowners are having better results with loan modifications recently, so it's possible that the default was cured by negotiating a loan modification rather than proceeding with a short sale. Regardless, if the home is no longer for sale, it's time for you to start looking for another home to buy.

Good luck!
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Cindy Mello, Agent, Ripon, CA
Sun Jan 18, 2009
Hi Kathy,

The answer is probably more simple than that. The NOD was most likely rescinded due to the fact that they had an accepted short sale even though it fell out. To alleviate your concern, just ask the listing agent has the homeowner cured there default? If not, it would be assumed that the bank rescinded it due to the accepted short sale. I would make sure the listing agent is doing everything to now get your's accepted. If they rescinded the NOD, then yes the foreclosure process starts over again. The bank is not going to discuss the matter with anyone other than the homeowner or someone who has a signed letter authorized by the homeowner to speak to them about there account. Good Luck!
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James Gordon…, Agent, Hamilton, OH
Sun Jan 18, 2009
Kathy on a short sale your contract is with the owner not the loan holder.

The owner deals with their lender to forgive debt or work out a payment plan.

The bank can not talk to you about the current owners finacial status with a letter of permission from the loan holder this is confidential information.

Another reason that it can fall out is that the true holder of the note was not named on the action. In my area I have seen forclosure actions thrown out because they are filed in the name of the servicer not the note holder.

Good luck and remember short sales take a long time and normally do not result in a sale!
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