April 4th, 2010 by admin
I have been on here for a while asking questions about this and here is another one. My house was supposed to close on or about March 31st of 2009, the buyers are 100% approved for the mortgage from Wells Fargo. After alot of back and forth issues with Wells, ( one issue was the association not having a Fiduciary Bond, which they actually do have, it is called Employee Dishonesty..something something.) The bank was made aware of this today, and is now finally saying they are not willing to lend to anyone buying a condo in this development after all this time and going back and forth. This is a very nice neigborhood so that is not the problem, the bank just doesn’t like how the association is run, is what it comes down to. I have been paying two mortgages for 2 months now and the first is right around the corner. How can I get the buyers escrow money which is 20,000? I know that is a tough question to answer and it depends on the contract but I was just throwing it out there to see what people think. Isn’t there some law against this to protect me since I lost out of numerous offers in the last few months. I think this fringes on one of my ammendments..to live the american dream and raise a family, own a home..something like that
Thanks for any answers you may give. Also will the buyers have to completely start over again with a new bank or can it be a little faster since they already went thru a large portion of the process with another bank??
I had a new home built and had to close on it, I know itr was not smart to move before closing but I had no choice. The buyers did not go to any other lenders yet, but they just keep saying they want the house so so bad and wil do anything not to lose the sale, so I said to move in and rent it from me until they get approved but they denied that offer. I guess they don;t want it that bad then.
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there should have been 1 huge contingency, if the buyer cannot obtain financing the deal is off and you don’t keep the escrow money it goes back to the buyer, sorry but nice try
That is the liability for someone who moves Before the sale closes .
More banks are balking at condos because their default rate is getting higher than SFRs and
The vacancy rates are putting the HomeOwners Associations into problems with utility companies shutting of services to some buildings even though some of the units are still occupied .
Your borrower should have been courting a couple of lenders to pick the best deal & / or use as a fallback .
DID they do that ?
If not , then you may have to start renting the place until it sells .
good luck
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what does your sales contract say regarding the buyers’ financing contingency? it’s what’s in writing that counts.
It all depends upon the contract you have with the buyers. Wells Fargo is fully within their rights to decline the loan, so there is little chance of getting restitution there, (and there is no such thing as “totally approved” mortgage, until it has closed).
Now, most real estate contracts have a penalty clause where the buyer forfeits the deposit if they do not close by a certain date, if all other preconditions of the contract have been met by the seller. But dont think it is going to be that easy. While you can refuse to return the deposit, they can also (and propably will) file suit against you to return the money. While there is no guarantee that they will prevail, they will be able to file an injunction against you selling the property until the suit is satisfied. that can prevent you from selling the condo for up to 2 years.
therefore, the best scenario is to have your attorney negotiate either a settlement, where you retain a portion of the deposit, and the contract is voided, or they continue with a finace with another bank, and pay you a late closing penalty, equal to what the costs you have incurred (interest / taxes / condo fees / insurance) from the time of the planned first closing, to the actual closing date.
Either would be fair.
The truth is, I don’t think you can or should get the 20k. It wasn’t the buyer’s fault. The bank has guidelines about condos/etc. And until they could see the docs, they couldn’t make a firm decision.
I would suggest that the buyer see another lender ASAP. WF should be able to even transfer the appraisal over to the new lender.