Sam, that's fine....but the question is "is the husband on the Note" ? If so, he will have to cooperate with the bank negotiation side of things. Since he is on title, he has to be on the mortgage, but this doesn't necessarily mean that he is on the Note. He probably is, but you need to verify if he will cooperate. If he Is on the Note, and won't cooperate, it's dead.
It's 100% certain that if you don't submit an offer you won't have a deal. Sign the offer, let the agent worry about getting the husband to sign. Sometimes people in such situations have hard feelings, and don't believe the other person, etc., but when they see proof, they do their part.
The QCD will allow the wife to sell, but if the husband is also on the note, he will have to submit financial paper work to the bank, just like the wife, and also execute the approval letter.
Then you don't have a valid contract to obtain good title until the husband executes a quit claim deed if ordered to do so by the court. The date of your contract needs to be after he deeds the property (date of the deed being made or granting title, not when filed). ;)
Sam, that's fine....but the question is "is the husband on the Note" ? If so, he will have to cooperate with the bank negotiation side of things. Since he is on title, he has to be on the mortgage, but this doesn't necessarily mean that he is on the Note. He probably is, but you need to verify if he will cooperate. If he Is on the Note, and won't cooperate, it's dead.
Then you don't have a valid contract to obtain good title until the husband executes a quit claim deed if ordered to do so by the court. The date of your contract needs to be after he deeds the property (date of the deed being made or granting title, not when filed). ;)
Is this a divorce or did the husband just walk out? The bank may ask him to sign the QCD, but they can't make him sign, the court will instruct him to sign if it's a divorce. It's irrelevant to the contract if the husband is on the note or not, as he is in title, it's relevant to the bank as Wayne mentioned he will be in the SS as a co-borrower if he's on the note. He could be in title and not one the note, but that's not the usual case.
You also need to ensure there will be no deficiency. Another issue, since it sounds like you're working with her, is the Mortgage Relief Act is expiring and in 30+ days she can get tagged for the forgiveness of debt from the SS. If the husband is on that note, bring this up the seller so she can get with her attorney so the court may direct the tax hit to be shared jointly or on one party, if he was a bad boy, the judge could stick him with it (LOL). :)
The quit claim isn't the issue yet. Is the husband on the note? If so, the wife can negotiate a short but the husband would have to sign all the necessary docs. If someone other than the wife is negotiating with the lender such an agent, then both the husband and wife would have to sign the authorization to release before the the negotiations can even begin.
So the bank probably won't even look at it until they both sign...right?
The only possible way for a contract to be valid would be either:
(1) Both sign the sale contract now, or
(2) Husband QCD today and wife signs contract with me tomorrow.
Grrrr...
You pretty well got it, if it's a local bank, or even if not, I'd have the wife call and give the bank a warning shot, inform them of what's going on, especially if payments are late. They can flag the file with a phone call. If the husband won't cooperate I'd just wait for the divorce and let her attorney or the judge to compel him to start signing. I've had borrowers talk to banks and tell them, "here, would you talk to this guy please" and they would. When you get him straightened out, you can begin with the formal contract and SS. Good luck. :)
So the bank probably won't even look at it until they both sign...right?
The only possible way for a contract to be valid would be either:
(1) Both sign the sale contract now, or
(2) Husband QCD today and wife signs contract with me tomorrow.
Grrrr...
Since the husband is a borrower on the note, a quit claim won't help. It would be an unusual lender that would work with just the wife, regardless of the quit claim. The husband has to participate in the short sale. The courts can make him deed his share to the wife (or do it on his behalf). But short sale negotiations come first.
Is the wife working with you? Or is the property listed?
Yes husband and wife are both on the note.
So the bank probably won't even look at it until they both sign...right?
The only possible way for a contract to be valid would be either:
(1) Both sign the sale contract now, or
(2) Husband QCD today and wife signs contract with me tomorrow.
Grrrr...
Since the husband is a borrower on the note, a quit claim won't help. It would be an unusual lender that would work with just the wife, regardless of the quit claim. The husband has to participate in the short sale. The courts can make him deed his share to the wife (or do it on his behalf). But short sale negotiations come first.
Is the wife working with you? Or is the property listed?
Property is listed.
I am just the buyer.
The foreclosure sale date is April 3, 2014.
They don't have much time to fool around.
I think the listing agent is figuring this out as she goes along.
The agent may be wasting her time. She can't negotiate a short if she doesn't have the ATRI signed by both parties on the note. Even if the husband signed the QCD and the ATRI at the same time, the lender will still require the husband to sign other paperwork and the short sale acceptance agreement/letter.
If I were you I'd be willing to sign the contract and then deposit very little EM. And no inspection until the short sale is approved. I wouldn't risk any money on it.
A security interest is granted by an owner in title, if a person no longer has an ownership interest by any granting of his full interests, the security interest and rights of redemption are abandoned. That is what happens when this husband made or makes a QCD. It doesn't mean the grantee of the security deed is unsecured as the collateral is still encumbered by the prior deed of trust or mortgage. The husband no longer is in title, his security assignment is moot after the fact and has no rights of redemption.
Next, loans are made jointly and severely, which means the lender is not required to do anything with both borrowers they can enforce the terms of a note or any satisfactory settlement with only a co-borrower/maker. If they only deal with one partner, they may lose their right to seek any deficiency from the other partner. This goes on all the time and has before short sales had a nick name and the nick name doesn't change the rights of a lender or the terms of the note.
Special accounting and write-off provisions are afforded now for banks/lenders in accepting less than the amount owing, a short sale. None of these provisions are made unavailable to a lender` electing to release any borrower and conducting the business at hand with another borrower.
The reason banks require consent, notice and agreement is due to their liability in not only a SS but any loan modification, assumption or other action in that loan in dealing with those held responsible for the debt and redemption.
What you may have too are state laws concerning Realtor's responsibilities, disclosures and requirements pertaining to their involvement. Those do not place any burden on any lender or their right to enforce the note, jointly or severely with any maker, endorser or guarantor.
A lender can certainly elect not to seek a deficiency from one borrower and rely only one or more of the makers, endorsers or guarantors.
So, again, the only requirement for the lender to deal with this husband arises from his position in title, taking us full circle to his granting the security interest and rights of redemption. If he is no longer in title, the bank is not required to deal with him at all, they don't need his consent on anything but if they go there, they may well be, in essence, releasing him from the obligation and any right for any deficiency. This is also common in divorce cases when one partner is awarded the property. It's up to the lender if they want to go there and not seek any judgment against the forgiven debtor. The forgiveness of debt will be going to the party selling, not the one released prior to a SS as to the tax burden, if any. The release is at the whim of the lender and can be done prior to any other matter and does not require a borrower or obligor to give consent to be released from the obligation, that is up to the lender.
An ex-whomever can execute a deed and take off to Brazil and never speak or hear from the other ex-spouse, which is what happened last Spring here. The husband did a QCD, agreed to a divorce with his attorney and left town. The divorce was finalized later. She did a SS with Wells Fargo, who basically said, forget him and dealt with her prior to the divorce being final. I know because I spoke to WF for her on the phone, a friend of a friend who lives just a few blocks away. It was less than 10K under the amount owed. Nothing was ever required of him. We already had a buyer and got a listing agent who owes me big time.
Another, was 2/3 years ago, an owner went to prison, he QCDed the property over to his wife. The Realtor (I know the Realtor well) wasn't required to communicate with him at all due to him being on the note. The lender releases him and life goes on.
I agree with K. Marie that you shouldn't put much in this deal. :)
I'm finding this informative ... and a little different than what happens here.
When I saw that @Bill Gulley had responded to this thread, I went and made a bowl of popcorn before settling in with War and Peace ... err, Bill's post.
The couple is from Brazil...I met them when visiting the property...and bank is Wells Fargo...hahaha.
Don't risk any money on this, I agree.
I know it's sort of a messed up situation, and most likely the LA is in over her head - and I don't understand why Seller doesn't have an attorney advising her what she / they ought to do, I don't know.
However, I am making an offer with a price that works for me, and surprisingly this one doesn't have a bidding war (that could be because everyone sees this being a hopeless situation, or may be it's the holidays), so I do want to get my foot in the door and get this sealed, even if it's invalid I might find myself in the right place at the right time if they get things sorted out.
So I submitted an offer.
I put $0 EMD down now, and $0 when seller signs, but 20% upon lender approval, and 15 days to close after that. I am sure the LA will come back and balk at no EMD, and I will point out I offered to do inspection upon Seller execution not lender approval, and that involves money up front for doing the inspection and ordering the HOA governing docs, and I hope that would do the trick. If they execute it and I have to inspect, I will just show up and do the inspection myself, the governing docs is like $50 so it's no big deal. So if this flies than my cost is $50 to tag along and see how this unfolds.
Well, your seller thinks she contracted, that's important, but a contract without consideration is just isn't valid in RE. When things settle down and straightened out, put a down on that contract before the bank sees it, they want to know you're serious. Good luck. :)
Will, I might have 11 awards, but old Dion I believe beats me out for the longest post. I probably have more words typed, LOL
Roy, did you enjoy the popcorn? Back to your short novel ....
My last two successful short sale, involved no EMD until lender approval.
Actually I used to put something down, and half the time the agent said don't bother. Just write a check, scan it and put it as part of the package. Even the escrow agent got sick of receiving and tearing up $5000 checks.
So I don't do EMD until lender approval anymore, but I will make sure they know its a serious offer and I intend to follow through unless they mess up. In this case, who knows what would happen? I didn't put the QCD contingency into the contract, I told the LA if their attorney wants to draft something I have no objection to include it but the husband's signature now is better than a QCD later, what's the point? They are not getting a penny back anyways. Doesn't the bank need hardship evidence from the couple not the wife only?
The other thing is backup offers on SS, does anyone put EMD on those? I am on the hook on 4 backup offers, have yet to have one fall through to kick me into first position.
All RE is local, contracts aren't made here without EM, something about basic contract law, 101 and consideration or some such. Good luck on your deal :)
Sam, I agree. But, make sure this agent realizes the bank won't review the file until the husband either signs the purchase agreement or does the QCD to the wife. A purchase agreement is one of the first tasks to be uploaded int WF equator system.
Right now, I am just sort of playing along to get the contract signed. I have the cleanest offer, cash, inspection up front, no other contingencies, and looks like they will take my offer. I have already talked to HOA, no outstanding balance as of Dec 1, no rental restrictions, etc...
I don't want to be seen as "the guys who asked all these questions" and get eliminated because of that.
But once they put ink on the offer and have accepted me mentally as the buyer, during my 15 day inspection period I can make them and the listing agent aware...from the angle of me trying to do all I can to save the deal and not waste time.
by the way, last year I lost out on two deals by being too inquisitive and transparent up front.
One REO deal had contract signed with FNMA, and I ordered a survey because a neighbor's fence did a zigzag and I wanted to know why...didn't have to could have waited since it was cash. I somehow OKed the surveyor to give a copy to everyone, my agent, LA, closing co...and prompted the closing agent to notice a discrepancy in the original legal description which amounts to a typo, but they cancelled the closing and FNMA had to reforeclose.
Another short sale I was the buyer they wanted, even had a verbal was waiting for it to get signed, then I noticed they had fenced in a strip of land about a 12' wide across the back that is supposed to be part of an alley, but the fence had been there for 20 years and no one noticed or complained. I noticed because I read the legal description and traced it. So I called and asked "what's going on with the fence in the back do you know you fenced in part of the alley and also the utility easement to the east you fenced that in I didn't see a permit for that either..." They said they would check into it and two hours later they said they signed with someone ear. I learned my lessons LOL.