I had Bank of A. approval from prelim HUD for short sale. Went to their closing dept w/new HUD & now they want more money - do we have recourse?

Asked by dangvuanhthu, Atlanta, GA Mon Jul 22, 2013

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7
Walter 'Skip'…, Agent, Brea, CA
Mon Jul 22, 2013
When the bank approved your offer they were given a net amount they would receive which was shown on the HUD1. The bank approved that amount and the approval letter more than likely stated the date by which you had to close escrow. If the deal changed and a new HUD1 showed a different amount or the time to close was not met, the bank would need to agree to the new terms. It is within their rights to renegotiate if the original deal was not met.
Good luck,
1 vote
The bank is not a party to the contract. They don't have to agree to any terms. The contract is between the buyer and the seller. The only involvement the bank has is to say whether or not they will participate in the agreement between the buyer and the seller.
Flag Fri Jun 20, 2014
Richard Ellis, Agent, Encino, CA
Fri Jun 20, 2014
It doesn't sound fair when you are the buyer. The short sale lender wants to get the most they can even if it is unreasonable. But, they have the power to agree to your price. You need your agent/broker to push for you. Good luck!
0 votes
Termite Insp…, , Los Alamitos, CA
Fri Mar 28, 2014
0 votes
Ingrid Ski R…, Agent, Mission Viejo, CA
Wed Jul 24, 2013
Your agent should be helping you and or there broker for advise
You may want to talk with a real estate attorney for advise

Good luck
0 votes
David Pham, Agent, Garden Grove, CA
Tue Jul 23, 2013
Big banks now often outsource the short-sale negotiations to third-parties. We have seen lots of those cases lately. Banks want more but don't want to get tangled in those "unethical practices" so they put that process to third-party company.

Since it is hard to fight with those deep pocket banks, just go over the entire deal with your clients and see if it makes sense to move forward.

Regards,

David Pham
National Brokers
0 votes
, ,
Tue Jul 23, 2013
Walter is right on with his response. As you know the market has been rising rapidly for a while now so I'm not surprised they asked for more. I would ask them to honor the first amount and see what happens. If they do make sure to get it in writing and close ASAP.
0 votes
Walter unfortunatley isn't right with his response. The bank reviewed an "Estimated" HUD1 to base their approval and every approval letter i've ever read or created is subject to "Minimum net proceeds" acceptable to the lender. If as the buyer states, there are additional taxes due, that will naturally reduce the net proceeds to the investor and, naturally increase the amount short and as a result, increase the amount required to complete the shortsale. This has nothing to do with the bank. how is it their fault?

Regardless, they have no recourse whatsoever with the bank.
Flag Fri Jun 20, 2014
Elisa Dewees, Agent, Cherry Hill, NJ
Mon Jul 22, 2013
are you on the Buying side? Most banks will negotiate. Depends on how far off your offer is from the bank's appraisal. It can help to write a letter explain why you made a lower offer.
0 votes
Yes, I am on Buyer's side. The Title company is short by $25K on their prelim. HUD due to additional years back taxes. The bank is looking for a certain amount. We are 9 months in process, on our 3rd Asset Manager, 2 BPOs & Buyer-paid appraisal. Do you think they are delaying so market keeps rising to get the price they want? Do we have recourse here?
Flag Mon Jul 22, 2013
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