Bank Accepted our offer now PMI must accept.. Whats this? (foreclosures, 3%)

[whatsnext11]

So Bofa accepted our offer and the realtor said we should be getting our approval by friday.. Well yesterday we find out that Pmi has to accept the offer to .. I'm so frustrated.. I thought since bofa accepted our offer that everything was good to go and I thought for sure we would have our approval yesterday but I was wrong... I have read things that say PMI is a short sale killer is this really true?

[Broker Dave]

PMI (Private Mortgage Insurance) is a product banks use to protect their investment when a home is purchased with less than a 20% down-payment by a buyer,

Ways to PMI could be removed from a loan,

Home owner paid down the loan value to homes value by 20% then homeowner could request that PMI be removed.

Anytime the value of the home increases by 20% or more over the loan value and the loan holder called the bank to have the PMI removed. Many home owners could have done this but were unaware or times where good and just kept sending that payment.

Needless to say with the banks taking losses on loans so is PMI, currently their site has some grim news, hopefully they work through this or gone is the low or no skin in the game loan.

Hope this helps,

[MafHoney]

We've had our house under a short sale contract for right at a year now and the PMI company is still holding it up. We finally got the bank to approve it (after turning down the first offer and then getting another one at the same price I think they realized there wasn't going to be anything coming in any higher). And now the PMI company has just been dragging their feet with it for 9 months. The first time around they said they'd agree if we paid $25k and then take out a loan for 30k to cover everything. Our lawyer agreed it was bs and that if we had that kinda money laying around we wouldn't be in this position to begin with.

So that was last November? It's not almost October and they just now want updated financial info. So yeah.. It's a process. And would be reason #1 as to why it's declined.

[jm1031]

Another use of mortgage insurance was lender or investor purchased MI when there was a home equity loan that increased LTV above a certain level. the homeowner might not have been aware of this MI.

MI complicates things. If the lender agrees to the short sale without MI's OK, the mortgage insurer won't pay the lender's claim. The MI payout gets figured into what the lender will accept, so the lender has to get paid by MI. The MI generally will be tougher when reviewing the seller's hardship and finances and will often ask for cash or a note from the seller to agree to the deal. They may also ask the buyer to pay more, reducing the amount they have to pay.

It doesn't mean it won't work out, but it adds to the process. Hope it goes well for you.

[whatsnext11]

Mafhoney- Oh my goodness thats crazy! If this goes past 8 weeks I'm done and will start lookin for a new house.. The sellers bought the house for 204,000 and we offered 124,000 with them paying 3% closing cost we already accepted everything and signed the offer and were told we would have our written approval by friday but of course that didnt happen. We put on offer in July 26th but the seller didnt sign the offer until Aug 12th.. I think its crazy them asking you to pay 25-30K or right if you had that kind of money you wouldnt be doing a short sale in the first place!

[MafHoney]

Yeah, it's been pretty ridiculous. What they're saying now is when we moved into the house we're renting now, we went out and spent "thousands of dollars in new furniture, so we can obviously pay our mortgage". So I had to send them all the bank statements and point out that we sold our old dining room table to buy a new table that cost $300. I know my math skills aren't that great, but I'm pretty sure $300 does not equal "thousands of dollars".. They'll basically find any reason it seems to draw it out as long as possible and just say no.

[Jkgourmet]

Originally Posted by whatsnext11

Mafhoney- Oh my goodness thats crazy! If this goes past 8 weeks I'm done and will start lookin for a new house.. !

That's probably an unrealistic time frame for a short sale. If you really feel that way, you should tell your agent you don't want to view short sales anymore - just Foreclosures and traditional sales.

[whatsnext11]

Jkgourment- I was saying if we havent heard back from Pmi in 8 weeks that should be enough time for them to get back to us! Oh I will never ever deal with another short sale again to much of a mess to go through and we wouldnt have done this one to begin with but our realtor said it would only take about 6 weeks so we decided to go ahead with it!!

[whatsnext11]

Pmi got back with us today and said they would approve the sale but needed the sellers to pay $3,874 the sellers said no way they were not paying anything .. So I asked if we could pay the 3,874 and they said yes that we could so we signed a addendum saying we would pay the money at closing! We are excited to finally be getting a house that we love but just wish we didnt have to be out the extra money but oh well you win some and you lose some.. Now the next step will be the written approval.. YAY and as of now our closing is set for Nov 18th .. I'm hoping that we have no more surprises :/

[Jkgourmet]

Congratulations and I hope it all works out for you and your family. Let us know.

(6 weeks for a short sale??!!!??? That realtor needs a reality check, or you need a new realtor if this deal falls through)