The Lenders Who Require Approval, Show Approved Costs and Two Payoffs that Dont Match

***No portion of this article may be reproduced without the written consent of Grugnale Law***

Over the last month, we have worked and closed multiple deals with several different lenders. Some of the lenders provide very short, succinct letters that require only that they are given a net number in order to release the property from the mortgage, and the borrower from the deficiency. Others lay out in detail approved costs that can go on the seller side of the HUD like an easy to follow road map, require prior approval of the final HUD before closing, and provide said approval in a clean, easy to confirm letter or fax. No one lender is better then the other in this respect, however I tend to feel a sigh of relief when a lender requires HUD approval BEFORE closing, knowing I have in my hand an easy to enforce promise that we are doing the right thing at the closing on letterhead.

Another situation we have run into this month in multiple deals is where there are two lenders on title who’s payoff letters do not dovetail- in that Lender 1 gives Lender 2 one amount, while Lender 2 requires something higher or different. I will still close this type of deal, however if I am going to go out on a limb and hope the Lenders agree to each other’s payoff on the actual HUD, I need each Lender to issue for me that lovely enforceable approval confirming it. The same is also true if Seller, Agent, or Buyer want to contribute to a payoff. It has to be on the HUD (as it wont be in the actual payoff letters) and it has to be approved in writing by all Lenders.

Short Sales are unique, sometimes moving target transactions, but as long as everyone is on the same page, IN WRITING, they are totally insurable and enforceable after the closing.

Meghan Grugnale, Esq.

Grugnale Law Office, PC    and   Phenix Title Services, LLC

400 West Cummings Park          30 International Drive

Suite 6600                               Portsmouth NH 03801

Woburn, MA 01801

P: 603-498-4601

F. 800-863-3488

1 Response to "The Lenders Who Require Approval, Show Approved Costs and Two Payoffs that Dont Match"

Leave a Comment

css.php