I am the buyer in this transaction. I have contacted home owner in default and worked with them for months to purchase their home. We opened escrow back in December through our realtor.

Owner filled out all appropriate paper work in timely fashion, including hardship letter with proof of physical disability and loss of job. They surely qualify for short sale.

Full payoff amount is around $300k (legal fees etc. included). Home is in major disrepair. I had two separate contractors bid for repairs. Repair estimate was for $70k. I submitted offer at $215k all cash, as is, no contingencies. I attached both repair estimates by licensed contractors as well as my proof of funds.

Initially back in January we got a counter from loan servicer for $290k. We countered asking for a price evaluation as we felt that was too high. They did not respond for over a month. Finally after hours on the phone we find out that the loan had since been transferred to a new servicer. We got in touch with that servicer and now they will only accept a full pay off. When we asked about the value dispute, they would not give any answers as to if that was addresses or not.

My questions are.

1) I am sure the home is not worth anything close to $300k. And therefor the value dispute. Aren't they legally liable to at least address that request and give some documentation to support their price?

2)From the perspective of the seller: How is this fair to the seller. They are more than qualified as far as hardships go. There is no way the home will sell for the banks price. They are essentially forcing distressed home owner to foreclose even with a genuine hardship. Owner had previously received letters from bank in mail giving them information of short sale options. We went through everything they asked and gave bank an all cash offer. Is there any legal action the sellers can go through to push this short sale and avoid foreclosure?

3)It seems the only logical explanation is that the bank wants this property to foreclose. How could that be beneficial for them?

Thanks for your time.

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