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At 4:30 pm last Friday, my relative went to closing on the purchase of a bank owned property. All final closing documents were signed by both parties (buyer and seller) including the HUD1. The funds were wired directly to the bank at 5:13 pm. At 6:30 pm the seller's settlement agent called and demanded the keys be returned because their system was down and they had no way of verfiying closing. At 8:00 pm the seller's settlement agent declared the closing “null and void” because they still could not confirm closing due to their systems issues. At midnight the contract expired. Can the seller declare the closing null and void after HUD 1 is signed by both parties and funds are wired? Who owns this property right now? The buyer or the seller?
At 4:30 pm last Friday, my relative went to closing on the purchase of a bank owned property. All final closing documents were signed by both parties (buyer and seller) including the HUD1. The funds were wired directly to the bank at 5:13 pm. At 6:30 pm the seller's settlement agent called and demanded the keys be returned because their system was down and they had no way of verfiying closing. At 8:00 pm the seller's settlement agent declared the closing “null and void” because they still could not confirm closing due to their systems issues. At midnight the contract expired. Can the seller declare the closing null and void after HUD 1 is signed by both parties and funds are wired? Who owns this property right now? The buyer or the seller?
- was the deed delivered to the buyer? A deed conveys ownership, so if your relative was given it, they officially own it.
Often it is policy that the settlement company won't issue keys until they have confirmation that the wire went out; and common enough the cut off time is around 3pm EST or so. If 'systems were down', presumably the settlement company had no indication that the wire went out therefore wasn't generated a confirmation/ "fed" #. If they are proposing to close today, and (want the keys back in the interim), then I'd want in writing assurances that no cost, penalty or fees etc be imposed to the buyer for such delay because banks have a knack of claiming that the wire and payoff was late and try to impose a penalty to the buyer ... imo, if its the settlement company's fault and failure, then they should be the one ponying up for any late fees and penalties.
We are not worried so much about the keys. The concern is that on Friday the seller declared the entire closing "null and void" because they could not confirm that the funds were wired. Now the funds are in the sellers account and we dont know who owns the property.
You have to look at the documents involved in the process. It would not surprise me if there is language in there somewhere that backs up the seller's position. I'd first ask the agents to get it squared away but, if there's any hanky-panky, time to lawyer up!
At 4:30 pm last Friday, my relative went to closing on the purchase of a bank owned property. All final closing documents were signed by both parties (buyer and seller) including the HUD1. The funds were wired directly to the bank at 5:13 pm.
Hmm, my bank does not do any wire transfers after 3pm.
Sounds like the contract was executed but not funded.
Until a new deed is recorded the property has not transferred and the deal is not closed. That is why you should always avoid closing on a Friday if possible.
I am sure that you will get this resolved, but your new closing will be several days later. That means a new HUD-1. Unfortunate, but not the end of the deal.
At 4:30 pm last Friday, my relative went to closing on the purchase of a bank owned property. All final closing documents were signed by both parties (buyer and seller) including the HUD1. The funds were wired directly to the bank at 5:13 pm. At 6:30 pm the seller's settlement agent called and demanded the keys be returned because their system was down and they had no way of verfiying closing. At 8:00 pm the seller's settlement agent declared the closing “null and void” because they still could not confirm closing due to their systems issues. At midnight the contract expired. Can the seller declare the closing null and void after HUD 1 is signed by both parties and funds are wired? Who owns this property right now? The buyer or the seller?
So the money in escrow was wired to the bank at 5:13pm? That won't show up until today.
The seller can declare it null and void because it is. The contract expired. That said, it just gets worked out today or tomorrow and everyone goes about their business. This is what real estate agents and closing attorney's are for.
That may vary by state. In Michigan, if a Deed has been delivered and accepted a transfer has legally occurred even if the Deed is not yet recorded.
This is true in Texas also. Once both sides sign and the funds are released, ownership automatically goes to the other party. No need to wait for recording. Our possession, per the contract, states "closing and funding". That means the transaction is "closed" when both sides sign, and it's "funded" when the lender gives their ok to release the funds they wired.
If it's cash, ownership transfers immediately upon the second party signing, as we don't close at the same time.
This is true in Texas also. Once both sides sign and the funds are released, ownership automatically goes to the other party. No need to wait for recording. Our possession, per the contract, states "closing and funding". That means the transaction is "closed" when both sides sign, and it's "funded" when the lender gives their ok to release the funds they wired.
If it's cash, ownership transfers immediately upon the second party signing, as we don't close at the same time.
This is a good point. In Oregon closing is the act of transferring the monies, and recording the deed at the county. Recording is in the definition for closing.
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