HUD-1 And Contract
I've got my first SS accepted. Verbally, the lender wants a Hud-1 and updated sales contract to show agreed upon price.
Bank is willing to pay all closing costs, just wants to net 51K. I've got the Hud-1 filled out and I estimated $5334.00 in closing costs. Do I make the sales contract for 56334.00?
That would show that the lender is going to get 56334.00 - 5334.00 = 51K as their net on the deal. But when i take the contract to my closing agent and get the actual HUD-1 completed how do I compensate for the difference between the estimated HUD-1 and the REAL HUD-1.
The closing agent won't provide me with a HUD-1 because they have to have the contract first. I'm confused on how to make this paperwork trail work...
Mike(NC)
"I've got my first SS accepted."
Unless/until you have their approval, and closing conditions in writing, you don't have an acceptance.
Preface the estimated HUD1 as an estimated HUD1, and add the phrase, "Under no circumstances will mortgagee's net payoff be less than, or greater than $51,000; the mortgagor will receive zero proceeds from this transaction."
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Thanks SSPro but what about the sales contract. Could I put TBD under the sales price with the condition "offer contigent upon Lender accepting 51k as the full payoff for the underlying loan."
Thoughts?
Mike(NC)
If it were my loss mit department, and I asked for a contract and HUD1, I wouldn't even consider it as a
'contract' without a stated sales price.
Also, the HUD1 is predicated upon a sales price, and a closing date.
Make the sales price enough to cover the $51K, closing costs, and anticipated property taxes, incurance, etc. thru the closing date.
I usually include a line item for an expense of $1,000 to $2,500 as a contingency fund.... to be applied to closing costs, or if not used, returned to the mortgagee.
Quote:I usually include a line item for an expense of $1,000 to $2,500 as a contingency fund.... to be applied to closing costs, or if not used, returned to the mortgagee.
How do you word this?
If there is money left over in this fund, does the loan amount get adjusted, or just the balance credited against the loan? (instant equity!)
"If there is money left over in this fund, does the loan amount get adjusted, or just the balance credited against the loan? (instant equity!)"
Most ss approvals will state that any excess proceeds are payable to the mortgagee.... so when I declare that excess proceeds are to be returned to the mortgagee... the mortgagee being the Plaintiff... (foreclosing mortgagee)
Sometimes, they insist that the check (excess) is payable via a separate check and not included in the stated payoff demand... as if they were keeping this little bonus a secret from the investor who owns the mortgage.
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