But he’s a great fan of Philip Roth, so we got talking about him. I was reading The Human Stain, which is about race. And frankly, because I had hardly opened the book, I didn’t realize quite how intensely it was dealing with race. That then led to a very interesting discussion where through talking about Philip Roth and others he started getting into something. It had nothing to do with what I necessarily sat down to talk to him about. I just went with it because it’s far more interesting to use your time that way than to try to get him to talk about Pakistan. Then he’s going to retreat into talking points.
The second part of this interview is here.
I am a Realtor in Pierce County, Washington, and I am attempting to close a short sale on a HUD insured reverse mortgage. As a brief summary, we have an otherwise qualified FHA buyer but Bank of America‘s interpretation of HUD guidelines prevent them from paying typical, ordinary and customary seller and buyer loan costs or, should I suggest that Bank of America is using that as their excuse.
As an example, and there are many others, despite the fact that nearly all closing in Washington State are handled through an independent 3rd party, an escrow or an attorney, Bank of America says HUD guidelines forbid them from paying a closing settlement or escrow fee. They justify their decision by claiming that since Washington Law doesn’t specifically dictate that closings have to occur through an escrow company or an attorney, settlement / escrow fees cannot be considered typical, ordinary or customary. Except for the closing of a FHA repo, in my own 38 years of experience in real estate, I have not had a circumstance where a closing or settlement fee was not paid in some fashion. In the case of the FHA repo, HUD has a specific closer located in Snohomish, Washington, who is under contract with FHA to handle those closings.
The bottom line though, our FHA buyer will likely be unable to complete the purchase because, like a majority of FHA buyers in our jurisdiction, beyond the down payment, the buyer lacks the additional funds to complete the FHA purchase. Bank of America’s contention is, the data we provided concerning what is typical, ordinary and customary in our jurisdiction has been deemed unsatisfactory. Yet, Bank of America continues to be unable to identify for us what exactly would be deemed satisfactory. As Realtors, we have been placed in a no-win situation.
If you would be interesting in discussing this situation further, or would be interested in reviewing the email treat from the beginning of our short sale negotiation, I would be happy to discuss this with you further.
At this point though, my questions include:
1). Is there any recourse against Bank of America?
2). Is it really the intent of HUD to essentially make it impossible for a FHA buyer to purchase a home where it involves the short sale of a HUD insured reverse mortgage? In the case mentioned above, due to Bank of America’s rigid unrealistic interpretation of the HUD guidelines, that is exactly what is happening. Is that really what we want?
3). Is it really the intent of HUD guidelines to allow lenders to put Realtors in a no win situation.
I would be extremely interesting in a response to our situation and my questions.
Respectfully submitted.
Ken Thiemann, Managing Broker
Director, Tacoma/Pierce County Association of Realtors
Windermere RE / Paragon Co.
(253) 370-5626
#1 Posted by Ken Thiemann, CJR on Mon 27 Dec 2010 at 09:18 PM