How can we have a closing date for escrow and no approval letter?

Asked by Jo, Los Angeles, CA Mon Aug 9, 2010

We are buying a short sale. The seller agent has sent in all the paperwork more than once. 4months later we were told we were approved. We were also told that b of a wants escrow to close on the 29th of August. Then, the bank requested another hardship letter. The seller agent sent it in. Still no approval letter has been sent to us. We have an FHA loan so we need to get in there and fix things in order to get the loan. So I ask how is it possible to get told on the counter we accepted that we need to close escrow on the 29th. of August and we still have not received the approval letter?

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Emily Knell’s answer
Emily Knell, Agent, Huntington Beach, CA
Tue Aug 10, 2010
When the listing agent gets hooked up with a BofA closing officer, it's obvious with your FHA loan you'll need more time to close. They will extend your closing date.
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Mission Viejo…, , Mission Viejo, CA
Mon Aug 9, 2010
Jo, The system BofA uses for short sale will give a date that it is to close by but until you have the approval letter, all dates are estimated time frames. Once you get the approval letter it will show a new date for closing. The listing agent has to request a new closing date from the closing officer at BofA to get that changed. Have your agent keep talking to the listing agent to make sure he/she is in contact with the bank.
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Richard Schu…, Agent, Los Angeles, CA
Mon Aug 9, 2010
Welcome to the exciting world of short sales! Banks love to do illogical things. They set closing dates, before they approve sales. The best you can do is to get your loan ready to go at a moment's notice, so as soon as you get an approval, you can fund your loan and close. In my experience banks will give extensions for closing dates without problem.

Richard Schulman
#1 Listing and Selling Agent
Keller Williams Westside Realty
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Judi Monday,…, Agent, Green Valley, AZ
Mon Aug 9, 2010
Hi Jo,

The short sale process can be both confusing and frustrating. Bottom line is that nothing happens without the Bank's approval letter--which usually (not always) states something to the effect that the transaction must be close within a 30 to 45 day period from the date of the approval letter.

Best of Luck,
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Glenn Gaspar, Agent, Signal Hill, CA
Mon Aug 9, 2010
Hello Jo, First thing speak with your agent and ash him/her if you had submitted with your offer the SSA, Short Sale Adendum, form. This form protects you and states when all time frames stated within the purchase contact are to start, plus when your deposit is to be submitted into escrow. Start there for if you did...Your close of escrow date will be different then what you have been told if you do not have the short sale approval letter from the bank.
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