Reprint of a post by Heather Barr from http://thephoenixagents.com/. I felt this worth repeating as much as possible since I just received a similar ominous requirement from Nationstar Mortgage on a short sale I am handing in Napa:
* We will require a deficiency note on the loss-theres no option to just opt out. We will review on individual basis and try to assist as much as needed to make it affordable.
Heather’s post:
Wrong On So Many Levelsby Heather on September 17, 2009
in First Time Buyers, Foreclosures / Short Sales, Investors, Op Ed, Real Estate Contracts
Another example of REO lunacy, about which I’ve written before.
Our first time home buyer is being required to sign a document containing the following clauses. She must sign before the bank that owns the house will even look at her offer, which is one among many offers they received. These are the most heinous of the terms they’re demanding:
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Earnest money must be at least 1.50% of the purchase price or $2,500, whichever is greater.
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Once Seller accepts Offer, Buyers’ earnest money is non-refundable for any reason.
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Buyer has “twenty-one (14) days from the date of Seller’s acceptance of Offer to” obtain final loan approval. (my comment – Welcome to the Homer Simpson School of Contract Law, Doh! 21? 14? Ah, who cares?)
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Buyer “agrees that any & all home inspections shall be made prior to contract acceptance”
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By signing [the document] Buyer agrees that she has either (1) completed all inspections and removes any inspection contingency and/or (2) waives inspections and removes any inspection contingency.”
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Any access to the Property is prohibited unless accompanied by the Seller or Seller’s Agent.
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Seller will not pay any real estate transfer, stamp or recording taxes/fees.
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Seller will not pay for a Home Warranty.
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“Buyer must pay Seller a $325 title clearance and document processing fee at time of closing…”
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“Financing is not a contingency to this contract.” (my comment – if it’s not a contingency, why do you care whether Buyer takes 14 or 21 days to obtain final written loan approval?!?! If Buyer doesn’t get the loan, they either pay cash or forfeit the earnest money.)
This? Ought to be illegal.
Huntington National Bank owns the home in question. Avoid them or hire an attorney to review their contracts before you sign them.
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