From time to time, short sales can get a bit crazy… a current deal we are working on with Greenwood Credit Union as the short sale lender, and with Mortgage Family as the loan servicer, has gone amok…  Fortunately, Mandie Sullivan, Accredited Buyer Representative (ABR) and Short Sale & Foreclosure specialist (SFR) is on the case (with just a little help from me )

Here is the scoop: We have a buyer who put an offer in on a short sale house back in June of 2010… the seller approved and the contracts were signed and submitted to the lender. Three weeks ago, we finally received an approval for the short sale from the lender.

So then, all things kick in, right? Buyer gets an inspection done, gets an appraisal ordered via his lender, gives notice to his landlord, schedules and pays for moving services, etc. as the bank wanted a very speedy closing, allowing just 3 weeks. We were just a few days from closing when, lo and behold, the bank comes back and says they are withdrawing the approval due to errors in the file.

It is the same old banking song and dance…

They say that they had failed to do an updated appraisal, and had ordered another, and that this new appraisal came back showing an increase in value of the property at about 20% since June of last year!!!!!

I wish… actually, properties in that area have decreased in value since June by about 7%, according to our in house appraiser.

They (the short sale lender and investors, by way of the servicer) then say the listing agent must put the property back on market at this higher value, and we must wait 90 days as per HUD rules, before it can be sold, to see if they get any higher offers, but that in any event, also as per HUD rules, they cannot accept less than 88% of the appraised value.

First of all, prices have actually declined in that area. Secondly, our buyer is now homeless and out of pocket some serious money, including inspections, loan fees and appraisals, moving costs, storage costs, etc. never mind the discomfort this has caused his family.

Of course, we are filing the formal appraisal protest. But the lender is acting like it is somehow the buyers fault that this is all happening… I got on the phone with the loss mit guy, who acknowledges that he made the mistake, and get his manager on the phone, who, after lengthy discussion, finally actually agrees to reimburse the buyer for his expenses, even if the new appraisal comes back and shows what we all know it will: that the purchase price is a fair price for that property.

Took some threatening to go to my Congressman and Senator about this, but so far, we may even save the deal, it would seem…

Our buyer client is very pleased at our efforts on his behalf (as all of our buyers are, I hope) but is now living with his mother, his family crowded in with his parents…

I will post later with how this works out… But if you have any questions at all about buying a short sale, give us a call: 401-293-0631.

Good News For Home Buyers who were under contract prior to the April 30th Tax Credit Contract Deadline:

The United States Senate late last night passed an extension on the deadline by which the closing must take place in order for the home buyer to receive the tax credit for the purchase. For contracts already executed prior to the April 30th deadline, the closing dates now extend to September 30th…

This will allow home buyers already in contract by the contract date deadline to receive the benefit of the tax credit, many of whom would not be able to close without it.

This is good news for the approximately 200,000 home buyers who have been delayed in closing through no faault of their own, being dependent on foreclosure note holders to approve the sale, or in the case of short sales.

While this will not impact the home buyer seeking to purchase now, it will positively impact the market in some areas of the country by reducing inventory that might otherwise end up back on market.

For more details, feel free to contact us, either by phone at 401-293-0631 or via email here.

Just want to let you all know that the government tax credit for home buyers, first time and otherwise, still are in effect for those who have served active duty overseas for at least 90 days in the past couple of years. If you are stationed at the Newport Navy base, or elsewhere in RI and have seen active duty for at least 90 days, you should give us a call to discuss the possibilities of finding and purchasing your new home and getting the maximum tax credit allowed.

Call Mandie at 401-293-0631 for more details. Or use our contact form…