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Help me out here guys, what right does a PMI Insurance company have to prevent the sale of a home. Do they have some type of ability similar to a mortgage lender that gives them the right to foreclose or put a lien on the property ? Would they put a lien on the house or the seller individually ?
Never seen this addressed. They are nothing more than an insurance company that is paying a claim on the loss to the original mortgage company.
I would love to know other thoughts on this issue. I've been thinking the SAME exact thing. I feel like we're getting squeezed for more money because somebody else made the mistake of buying a house they can't afford.
Help me out here guys, what right does a PMI Insurance company have to prevent the sale of a home.
Don't hold me to this or take it for the gospel, but I think as the insurer they have to cover up to 20% of the banks loss on a bad loan. If they feel the offer is too low they have apparently have the right to ask for more.
But I agree with you. They insured the loan. Why should they get a say in what it sells for? The only reason I can think of is by allowing them into the decision it prevents banks from dumping properties for 20% of the loan. I also suspect the home in question is a Fannie Mae backed loan, which would answer the question.
Buyer, go back and ask if the loan was an FHA or VA loan.
The PMI company can choose to take the home and make the bank whole, or to pay out a percentage to the bank. The coverage level depends on the insurance and is not necessarily 20%.
So yes, it is absolutely normal that the PMI company can stop a short sale. They will do so if they believe they will lose less money taking the house & selling it than accepting the short sale and paying a claim on the bank's loss amount. Now from what the OP is saying, it sounds like they may well be wrong about that.... but nothing she can do.
I lost $700 in inspection costs on the first house I tried to buy because we found big plumbing problems the seller didn't want to fix. There is nobody to go after for that.. part of buying real estate.
Well, we've made our decision and are going to give the extra $10K. We really didn't want to budge, but the PMI company and the bank are being horrid and tell us that there are now TWO other offers on this house and if we don't up it, we won't be able to come back later. To make things extra annoying, we just found out that our offer was accepted based on the fact the seller's Realtor told the bank that he thought he could find a way to negotiate a higher price later on. That's some team of ethical wonderboys, isn't it? Also, we just found out that a coworker of my husband had been LIED to by this bank within the last six months . Needless to say, we won't be opening an account there when we move into town.
Even though we're not happy about the extra $10K (which is more than a 10% increase), we will still have some equity right away, just not as much as we originally thought. I know immediate equity isn't incredibly common. What helped us make the final decision to give in was that our Realtor actually offered to pay us the difference in the mortgage payments for six months because she thought the deal was still too good for us to walk away. We could never do that, but her offer made us rethink the whole situation. She didn't want us to lose out on a good deal because we were upset. She's not going to make much money on this deal, which I feel kind of bad about. The PMI company said that in order for us to get this "great deal" at $110K, the buying and selling Realtors have to cut their commission from 3% to 2%.
I just think the property should NEVER have been listed at $99K if they KNEW that it wouldn't be enough. Is the bait-and-switch becoming a problem with real estate and/or short sales? IMO, short sales shouldn't even exist.
...we just found out that our offer was accepted based on the fact the seller's Realtor told the bank that he thought he could find a way to negotiate a higher price later on. That's some team of ethical wonderboys, isn't it?...
What's not ethical about this? Sounds like the seller's Realtor is doing their job to get a higher price for their client. That's their ethical and fiduciary duty. As long as the Realtor does not violate any laws or ethics to get the higher price later.
Quote:
Originally Posted by wokeuplaughing
...What helped us make the final decision to give in was that our Realtor actually offered to pay us the difference in the mortgage payments for six months because she thought the deal was still too good for us to walk away. ...
And your Realtor went above and beyond to represent your interests.
What's not ethical about this? Sounds like the seller's Realtor is doing their job to get a higher price for their client. That's their ethical and fiduciary duty.
What I find unethical about this is that they ACCEPTED our offer of $99.5K three weeks ago, with the thought that they would later push us up higher later on. I would have preferred that they had just countered us immediately after our offer of $99.5K or just had it listed at $110K in the first place.
What I find unethical about this is that they ACCEPTED our offer of $99.5K three weeks ago, with the thought that they would later push us up higher later on. I would have preferred that they had just countered us immediately after our offer of $99.5K or just had it listed at $110K in the first place.
Well, although you don't like their strategy, it is not unethical. Changing the price later requires both sides to agree. They could only push you up if there was some additional contractual negotiation required that may lead to a higher price. You could always refuse.
As it appears, the only reason the price was raised was due to the PMI company stepping in with their objection. I really doubt that the seller's Realtor had planned for this to happen so they could get a higher price.
While you doubt that it happened, I don't! He actually TOLD our Realtor that he thought we would come up higher from the beginning. Now, I JUST (just minutes ago) found out that they DID have a PMI rejection before us, so they KNEW what was and wasn't going to fly with them!
I hear your complaint & understand. It's the banks responsibility to get as much money for the House as possible and sometimes they can play the game especially if they get in multiple offers.
When buying a short sale or foreclosure your dealing with lenders and some back room clerks who many times got us into this situation. There are no faces to the deal.
Be happy you got a great deal like you did, thats what matters.
Be happy you got a great deal like you did, thats what matters.
Thanks, Rakin. I'm trying to be happy about the process being over soon. Even though the price is higher than we are totally comfortable with personally and financially, it's still a decent deal. I've got to keep focusing on that!
Just the fact that this short sale is going to be completed (from offer to closing) in just 5 weeks is keeping me optimistic. Our Realtor has never seen a short sale go so quickly!
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