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We put an offer in on a short sale last week. We still do not have a copy of the contract with the sellers signatures on it, but the contract went through attorney review and from what the listing agent is telling us, it was already submitted to the bank. How can this be? I just found out that the sellers won't even be signing it until this weekend. The listing agent guided my agent on the price to bid, and seems to think that it will only be 3-5 weeks for a response. There had been another offer on this house months ago, but the buyers didn't like the bank's counter and walked. Does this bode well for us, since the hardship package has already been completed? I'm just so confused! Also, we requested 3% concessions for closing assist, fully aware that the bank may or may not go for it. The listing agent told my agent yesterday that these people have no money for closing concessions...wouldn't it come from the bank?
The lender, depending on what type of loan it has, would allow the concession to be paid, the closing costs (commissions, title insurance, taxes, etc) and accept the net as enough to release the lien.
Releasing the lien is not necessarily full satisfaction of the debt.
Generally, and this is just from the short sales I have done here in my area, the contract is sent over to the title company (signed or not) for a HUD1 to be drawn up. That is submitted to the bank so the bank can start their process. I just completed a sale of a short that the contract was not signed by the seller until the letter of approval was received.
The concession will be covered on the HUD1. If the bank likes the bottom line, they'll accept. Unfortunately it appears that the listing agent doesn't understand the entire process.
Is the institution servicing the loan (collect/disburse PITI) the same institution who owns the loan?
Is there a second mortgage?
Is there mortgage insurance?
The seller has already qualified for a short sale, but the first offer failed in October. No one else has made an offer since (first offer was $325k, ours is $290k). The Lis Pendens states that loan is owned by Citimortgage, but the bank filing the Lis Pendens is US Bank. There is only one mortgage on the house, after the owners refinanced to combine their original 2 mortgages. How would I find out if there is mortgage insurance, and why does it matter?
Mortgage insurance is purchase by the lender, protects the lender from loss, but it was paid for by the owners.
Just another group that needs time to process the approval before it can get to you.
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