BiggerPockets

If it's a short sale...
isn't it up to the BANK what is accepted?

How did he convince the selling family?

Side note- Banks will tend to pass on an FHA buyer for a non FHA buyer...due to FHA inspections

the house is 3 years old, completely finished and in perfect shape. FHA will not have a problem with the house.

I wish the bank would see my offer, but the realtor told my agent the other offer, below full price, is stronger because it is conventional.

with the other shorts I have tried to buy, everything gets sent to the bank and they decide which they want to choose.

If it's a short sale...
isn't it up to the BANK what is accepted?

The purchase agreement is between buyer and seller. It is only up to the mortgage holder as to whether they approve the sale or not (and what the terms are).

Side note- Banks will tend to pass on an FHA buyer for a non FHA buyer...due to FHA inspections

Maybe for REOs, but not on short sales typically. Most loan servicers are not organized enough to analyze deals to that level.

with the other shorts I have tried to buy, everything gets sent to the bank and they decide which they want to choose.

The seller can only enter into an agreement with one buyer (technically). All other agreements should be held in "back up" status. The seller cannot legally agree to sell a property to more than one buyer, even if the sale requires bank approval for sale.

***By the way, I wouldn't really sweat it. I'll bet you a buck that the first deal crashes. Just make sure your offer is in back up status.

Dan Ross wrote: Does anybody have a number to the loss mitigation department at AMERICAN HOME MORTGAGE SERVICING INC?

Jeanne Drake
Home Preservation Dept.
Direct: 1-949-784-6011
Fax: 1-866-642-4196

Home Retention Team*
1-877-304-3100

* Typically, to qualify to speak to someone, you must have the proper loan identifiers:

Homeowner's name
Subject property address
Homeowner's Social Security number
Loan number

It might be better, then, to use the fax number above and, in a clear, concise and calm manner, explain why you are writing.

BTW, it doesn't matter to the seller/homeowner how much the house eventually short sells for. The homeowner gets not one thin dime out of the deal. From your description above, it sounds like the real estate agent is going to accept the offer that closes the fastest so s/he gets paid.

Contacting the lender is a waste of time unless you have an authorization from the homeowner. Your best bet is to contact the listing agents broker, in fact, i would actually contact the agent first to inform he/she that you intend to contact the broker if you are not properly notified (in writing) for the acceptance of a lower price.

I think, in california, there is no deficiency judgements filed for purchase money mortgages. However, if there is a second, this could be considered non-puchase money and may be on the hook for the difference.

in all likliehood, you will go no where because it sounds like the agent is justified or at least close enough to avoid any violations.

Short sales are so abundant today that I would suggest you find another house where they are not giving you the run around. You are probably right about the home being sold to a friend. Let them crash and die while you find yourself something else.

I can almost guaranty you that if the offer was even lower but a cash deal, the realtor would recommend it over a higher conventional or even higher then that FHA. With today's lending environment, a lower sure bet is better then higher offer with longer process and higher rate of decline. I lost a property recently despite being pre-approved because Wells Fargo could not complete the processing after two extensions.

FYI California has no deficiency when a typical non-judicial foreclosure takes place, while other states do have some deficiency recourse against the borrower. In California it is sometimes found that a property buyer agreed to sign on a loan for personaal liability besides using the property as security. In those rare cases there can be a deficiency and in some judicial foreclosures too. For the most part the property is the only security or asset the lender can recover against. In a down market that often means the lender may take a short sale rather than pursue the costs of a foreclosure.