Realtor Short Sales Training and Resources
FNMA Changes Terms of SS Approval
I am working with a CitiMortgage 1st (Fannie is the investor) and a Wells Fargo 2nd. I got an approval letter from Citi dated 9/28 that stated net proceeds no less than $144,258 and $3500 to Wells. Commissions, closing costs, all acceptable. No contribution from seller.
TODAY, I get a call from Citi, saying the approval dated 9/28 is void. Someone at FNMA screwed up and now they want $148,151 net and $4400 to Wells Fargo. (Should have been $4400 all along, 6% of the credit line) That's about $5000 that has to come out of someone's pocket! Buyer doesn't have it. Seller has vacated the house 3 months ago and doesn't really give a hoot. After going through this transaction for 4 months, I don't care to kick in all of my commission.
I have 20+ years experience in lending and you just cannot say "oops" on a written approval. Any ideas on how I can fix this? Or at least who can I write that would care to hear about this situation?
Replies to This Discussion
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Permalink Reply by Cindy Billman, CDPE, SFR on
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Contact an attorney - he can hold their feet to the fire with that approval letter
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Permalink Reply by Julie Tinkey on
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Thanks Cindy. I will do that and keep everyone posted
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Permalink Reply by Brett Ehart on
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If the property is worth it, I don't see why there would be a problem. $5000 added to a 30 year mortgage would be about $25/mo.
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Permalink Reply by Lisa Farmer on
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Have you worked with buyers ? ;) I agee with Cindy ... then someone has to pay the attorney. Try contacting Citi's legal dept.
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Of course. That's why I completely vet the buyers on my short sales and make sure they understand what to expect. If they are unwilling or unable to pay more for the property or come out of pocket to pay additional fees or expenses, then I advise the seller to wait for another offer.
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Wow - tough love - I like it ! May I ask how you vet your buyers?
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Permalink Reply by Akin Falodun on
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I would ask the buyer to add the $5k to the sales price.
If they dont want to, put it back on the market with the new price.
If the price is right, you should got another offer in no time since its an approved short sale.
Be sure to add the fact that is approved in your remarks.
You could do all these while you are still trying to tackle citi.
At the end of the day, you want to get paid, so do what you need to do to move the property.
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The buyer did up her price, it will be a bit of a stretch for the appraiser. Not a lot of comps. And the servicing is being transferred to someone else on Oct.29 so if we don't close on this deal, I'll have to start all over. And the more I read about CitiMortgage (and how they jerk people around) the more I am convinced it was Citi Mortgage's blunder not FNMA.
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Permalink Reply by Ken Crotts on
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These types of problems are best prepared for up front. I work with the Buyer and their agent up front to let them know that the lender is going to create a short fall situation, usually between $5,000 and $12,000. They need to be prepared to come up with between 1% and 3% more if they want the house.
By working with them up front they are less supprised and much more agreeable when the inevitable short fall appears at the end of the negotiation.
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Thanks Ken, yes I know all that . . . the buyer will pay more etc. It's just the changing of terms after the short sale approval in writing is just not acceptable in my book.
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Permalink Reply by Joy Baker on
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Citimortgage falls under the jurisdiction of the OCC. You could file a complaint for unfair and deceptive business practices.
Cheaper than a lawyer and it might get someone's attention.
Good luck!
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I plan too. I want to see what the outcome is for this buyer. Either we close by 10/26 or another servicer takes over. Then I will send a letter with copies of everything. And I am pretty sure Citi has it's HQ in Missouri. I just may send one to the Attorney General of the state too.
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