Posted on July 16, 2012 by Bruce Redman
On June 21, 2012, in the case of Cullinane v. Estate of Holly Vene, unpublished, the Michigan Court of Appeals addressed a case where a buyer sued the estate of a seller for specific performance on a short sale when the estate refused to close. The majority of the court’s opinion dealt with the seller’s legal capacity to enter into a binding contract. However, there was additional language that could severely limit the rights of sellers to back out of short sale contracts.
It is common practice in many areas for agents to simply add the language “subject to lienholder approval” on a short sale purchase contract. While this language would protect a seller in the case where a lienholder did not approve the short sale, the Michigan courts now call into question whether this condition is material at all.
In Cullinane, the court held that the term “subject to lienholder approval” was not an essential element to the contract. Therefore, the prospective buyer had the right to sue for specific performance even though there was no evidence that the lienholders had approved the short sale. Therefore, even though the Estate attempted to back out of the contract, it was not allowed to do so.
The best practice for agents is to include specific language that allows the seller to cancel the contract unless the lender’s approval is satisfactory to seller – in seller’s sole discretion – that seller can refuse to close under the contract. If the shorthand language is used, a lender can approve a short sale under whatever terms it wants, and the seller may not be able to cancel the contract. Proper representation of sellers requires an agent to inform her client of that fact. Careful drafting of contracts is essential to protect both yourself and your clients.
Filed under: Uncategorized | Tagged: cont, contract, short sale, specific performance | Leave a comment »
Posted on June 15, 2012 by Bruce Redman
Bank of America has announced “Enhanced Second Lien Deficiency Waiver Guidelines”. It is important when processing a short sale to understand all of the latest programs in place by all of the lenders. The latest announcement reads:
Based on the Department of Justice settlement, effective June 1, Bank of America is extending additional support to homeowners in agreeing to enhanced 2nd lien deficiency waiver guidelines.
Once you have determined if your homeowner may qualify for this waiver, contact your short sale specialist for establishing the amount to request for the 2nd lien.
Short sales initiated on or after June 1, 2012
The 2nd lien must be attached to a 1st lien mortgage owned by Bank of America
Bank of America has also recently announced that they are paying up to $30,000.00 to homeowners for a successful short sale. Working with qualified Realtors and attorneys is necessary to obtain the best possible results for you.
Filed under: Uncategorized | Tagged: attorney, Bank of America, Foreclosure, Realtor, short sale | 2 Comments »
Posted on September 23, 2009 by Bruce Redman
We are getting many questions from people having trouble making their mortgage payments. In response to the most frequently asked questions, we have compiled the following Top 10 tips:
- Do be proactive. – The more proactive you are to resolve your impending issues, the more options you will have available to you. Most all of these programs have specific timelines and since banks are so backed up and things are not happening overnight, you might find yourself out of luck.
- Do not think this will just ‘go away.’ – Just because you have not paid your mortgage in 4 months and have not received a foreclosure notice yet, certainly does not mean it is not coming. Banks are very backed up and it is only a matter of time until you will receive your notice.
- Do not hide from your lenders. – If you hide from your lenders they are going to think you are unwilling to work something out until it is too late. New programs are continually becoming available but you must know about them to take advantage of them.
- Do seek professional help. – Professionals can explain how the process works and what options are available in a clear manner as oppose to searching the internet for advice. Too much bad advice is being posted out there and everybody’s case is unique.
- Do not think legal representation is unaffordable. – Often these start-ups are charging much higher fees than attorneys because they are looking to make a quick buck and move on to the next thing. Attorneys adhere to and practice under ethical guidelines which gives the client recourse against the attorney if things go aria
- Do think all of your options through. – People often think that the first option is always the best or what their friend did will solve their issue too. In this instance, that is not the case. Since each case is different and there are many options available, understand them all before chart your course of action.
- Do try again. – If your first attempt was unsuccessful for one reason or another, try the next option on your list.
- Do understand your lender does not want another house. – Banks inventory of houses has recently dramatically increased. They can not afford to continue taking houses into inventory and often will work something out very favorable to the borrower just so they don’t acquire another house.
- Do know the foreclosure process. – Michigan’s foreclosure process timeline is quite long and homeowners should use it to their advantage. If foreclosure is the right answer for you, you can potentially live in your house for over a year for free.
- Do know what action your lender can take to collect the debt. – If a deficiency exists after all is said and done, your lender may have legal rights to try and collect the amount that you still owe. This process is quite a long one and can affect you for years to come.
We are conducting a free seminar for property owners facing foreclosure on September 30, 2009 in Sterling Hts., Michigan. For more information, call Bruce Redman at 248-594-5959 or visit www.redmanlawfirm.com.
Filed under: Foreclosure | Tagged: bankruptcy, Foreclosure, lawyer, loan modification, mortgages, short sale | Leave a comment »