Power Of Attorney Question
Hey gang, I am in a lengthy short sale process. The bank does not seem to be any in hurry whatsoever. I originally planned to do a subject to deal with hopes of also doing a modification, but after a long wait they decided (the bank ) did not want to go that route. I asked if they would be interested in doing a short sale, and they said definitely.
I have everything lined up, hardship letter, cover letter, seller net form, repair estimates, comps, etc. The only thing I do not have is the purchase and sale agreement signed by the homeowner. I am actually not buying the house, my partner is signing for it as the buyer. I am viewed as a "friend of the family" from the loss mit's view.
The homeowner is in another state unable to be reached. Cell phone is off and I have no way to get in touch with him. Since I have full power of attorney, can I legally sign the documents he still needs to sign? I believe there are two, the PFS (short sale app with the bank) and the purchase and sale agreement.
Any idea?
The homeowner knows fully what is going on, what we are trying to do and even that he will be receiving a 1099 for the difference at the end of the year. If I could reach him, I could get him to sign it and fax it back. But he is long gone.
Thanks in advance.
power of attorney or not, I think it is a bad idea. If he comes back to you in 5 years because you stole his house AND stuck him with a 1099; you would certainly get to experience some real legal bills.
I'd take $200 and go find the guy.
Felt, I think I agree with you. We are just starting out in this business (we have our first four properties) and I definitely try to always do whats right. We are not being rushed by the bank, so I have time to track him down. Thanks for the advice.
On another note, I attend a short sale group once a month and the guy who runs it feels that the seller net form should really be padded so that you have to room to negotiate. For instance, he likes to add termite bond, home warranty, listing and buyers agent commission, closing cost assistance, etc. Then when we start to negotiate we can back out some or all (even listing agent, she is friend) of these things while holding steady with our asking price. Does this seem feasible? This particular deal is is a HUD FC so I believe the bank is going to want to meet somewhere around 82% of the BPO minus the repairs. ARV is around 100k. Needs lots and lots of TLC, we have repairs estimated at 20K. We think (hope) the BPO comes back at 90 or so (82% of 90 is 73k - 20 K {repair estimate}) brings us to 53k. We are starting out at a net to the seller at about 50K.
Does this seem logical? It would be fantastic if so.
Thanks again for any and all input.
Suntzu18
Do you have the deed? Did the homeowner sign over the house to you? If he signed over the house and gave you POA on the property, then why not sign as POA?
There are many people who will run a skip trace for low costs. I know several but do not have my list handy.
Brenda
Brenda, yes I have the deed. It has not been recorded as of yet. He signed it over about 3 months ago when we were planning on doing the sub 2 deal. I wanted to find out exactly what the bank wanted to do with the 7K in arrears before ordering title search, record the deed, etc. We had him sign the deed over to a land trust and would then name my company as the beneficiary. Then the bank changed its mind on the modification, so now I am working on a short sale. I DO have full POA, but wanted to check as to whether or not it was illegal or unwise to sign the purchase and sale agreement on his behalf, as well as the PFS form for the homeowner. I do not want to risk anything. LIke I mentioned before I fully disclosed EVERYTHING to the homeowner as to what we are trying to do and does not care as long as we can help him avoid foreclosure. He is 8 months behind and there is not even a date set for the FC so I dont think the bank really wants the prop.
What do you think we should do Brenda?
Thank you...
Suntzu18
Talk to you title company to see if the POA should be recorded. Also ask if they need to verify that the owner is still alive at the time you use the POA to sign the deed. (POA are not valid after death).
I know people who use their POA to sign the warranty deed and the HUD back to the lender.
It is not illegal to use your POA. That is what it is for.
Brenda
I've found that you can speed up the process by contacting the bank the day after you fax over your LOA. Make sure you are actually speaking to the person that is handling your deal. Tell them that you are going to fax over a signed agreement and a net sheet. Then ask if if there is anything else needed. Most lenders require the same info (w-2, bank statements, etc.). The only thing that may differ is their application/information form. You should get all of the paperwork upfront from the homeowner so you're not spending time tracking it down later. These are just a few things you can do to expedite the process.