Our contract has been ratified for a short sale home a month ago, and I just heard from the agent that the second trust bank has approved the offer. So my question is, from the date it has been approved until settlement, could anything else happen that prevent us from getting the house? Can the bank come back and withdraw their acceptance letter?
When you say second trust bank, do you mean that two banks hold mortgages against the property?
pigtail
Member
posted: Oct. 14, 2009 @ 1:19p
that's correct. Both the of banks have now approved.
donnoyet
New Member
posted: Oct. 14, 2009 @ 2:04p
probably not - since that would be stupid for them to go back after spending time on investigating into your offer and accepting it and writing off their losses...
pigtail said: that's correct. Both the of banks have now approved. Ah. I assumed your original post meant that the homeowner had approved the contract (the easiest part of the short sale, since they don't care what you offer) and only one of the banks had approved.
With the approval of both banks, I don't see anything that should prevent you from getting the house. Stranger things have happened, but there would probably be greater costs involved for the bank if they chose to withdraw from the contract.
So in the short sale case. the bank will eat up the lost and let the house owner go? let say house cost 300,000. home owner paid down payment 60,000 plus some $2000 in monthly payment. Now the house is only sell for 200,000. The home owner lost 60,000+ $2000. The bank lost: 38000. Does that sound right?
watssion said: So in the short sale case. the bank will eat up the lost and let the house owner go? let say house cost 300,000. home owner paid down payment 60,000 plus some $2000 in monthly payment. Now the house is only sell for 200,000. The home owner lost 60,000+ $2000. The bank lost: 38000. Does that sound right? Depending on the mortgage, the bank could go after the homeowner for the balance, but that's generally not happening right now due to the amount of defaults and the cost involved.
So given that caveat, yes, your example is mostly correct. Although the bank's loss will actually be less than that, depending on how long the homeowner was actually making payments (e.g. If the homeowner had been making $1200 monthly payments for 4 years before the default, the bank would've collected over $56k, but the principal balance on the loan wouldn't have decreased much).
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