All Forum Posts by: Shannon Wright

@Chris Mason can likely give input on this topic..

The way I am reading this, it means that Broker holding the EMD needs to send out a letter in accordance with the above indicating the intent of releasing the entire EMD to you, then wait 60 days. You will either get your money (by default) or you will be in litigation.

You just need to pick your battles. Is $500 lost worth the fight? Only you can answer that. Good luck.

With 100% financing, there is no down payment. You should only be bringing in closing costs. 

My understanding with a Chapter 7 BK in Cali is that it could potentially remove the borrowers personal liability from owing the debt, but you are still secured against the property (as collateral) and would still be paid upon selling or refinancing. This is why being a "secured" debt is important.

Think of a car loan. In a Ch 7 BK, if the Judge does not allow the owner/debtcor to re-affirm the loan, then they are no longer liable for the car debt on a personal level. Once the BK is discharged, though, the Creditor will pick up the car to recover the collateral used to secure the loan. Mortgages are similar in the sense that you have another way to collect the money. If they continue to pay after discharge, then they are reaffirming your debt. If they don't, I believe you can foreclose (I would double check with an atty).

@Don Konipol is right in saying:

"Draws have nothing to do with lien position. And bankruptcy filing has nothing to do with title insurance or mortgage brokers. Either you misunderstood what the borrower said or he's providing misinformation."

$300 per diem penalty is a LOT, unless this a million dollar property. Usually, the per diem is calculated to be the actual carrying costs that the Seller is incurring as a result of your delay in closing.

Principal + Interest + Insurance + Taxes + HOA + any other carrying costs = Per Diem

Sometimes the offset of incoming rents are done, as well.

Many times a buyer will ask the lender to pay the per diem since they are the cause of the delay, have you tried that?

Have you called the broker of record regarding these threats? It is very clear that the Agent is biased to the Seller and you no longer have proper representation. I, personally, would not sign anything else (even a pre-release) without trying to resolve the dual agency issue. This agent is making 2x the commission for 1 sided work. Dual agencies are almost never a good idea.

Rents are always prorated through escrow, just make sure that escrow verifies if rents are paid on the date of closing so the prorations are correctly done.

What about the possibility of pre-releasing funds at 30 days, if an extension is needed? Not sure how much she would need or if it's a feasible number to release before closing, but it is an option if an extension is needed. #MoneyTalks

I can get you a title report now, to make an educated decision with regards to the property on title and liens on whether proceeding to a BPO, etc are worth it. I will gladly handle this closing for you and we can make sure everything is good to go, including paying taxes and giving you a lenders title policy! I can also assist in Note and Deed of Trust preparation, but not the rest of the docs. :) You could even cross-collateralize the loan, just for added security.

If he is borrowing as an individual, you need to clear his personal liens through the title search as well. Property liens attached to a specific property, but personal liens/judgments attached to EVERY property.

If you are funding all the funds at once vs. issuing "draws" on the loan like a construction loan, you have a apples and oranges and completely different possibilities and liabilities.  Construction loans with draws are more expensive to insure and have a lot more hurdles and stopping points between disbursements/draws.

I would suggest NOT using his title company (without extensive vetting), there is no way to know what "deal" he may have going on. Doesn't mean it's bad, but there are shady people in this business and you never know why he wants to use "his people."

What city is the property in? A lot of cities these days have permit searches online.

I would never suggest paying anything BEFORE closing (except the obvious, like appraisal). Paying through closing will ensure they have to perform in order to get paid...which is what you want.

Good luck!

In Cali, brokerages do NOT hold funds, only escrow does. Here it would sit in escrow until there is a court order to disburse or it will be Escheated. I don't know rules for that state and escheatment rules are different everywhere, but in Ca it is 7 years. However, most companies in Ca will Interpleader the funds before the escheatment period (an interpleader basically an action by the Escrow holder to force a court order to disburse the funds and all costs for the same are liquidated from the funds on deposit). So, if there is $25k on deposit and it cost $5k to do the interpleader, the disbursement would be for the remaining $20k in accordance with the order of the court.

You should talk to the closing agent holding the funds and ask what their rules are on escheatment and interpleaders in situations like this.

@Russell Brazil his transaction is in Indiana, not Cali.

Will your IRA facilitate an IRA Custodian purchase transaction? I have done these a few times (as Escrow in Cali) and they are the best way to keep the IRA portion of the investment safe, from what I know.