Expert: Lori Frankfort - 3/14/2009

Question
Let's start off with the fact that my agent has been less than perfect and the mortgage broker has been worse.  I will provide you with details to the current problem.

Facts:
1.  I am buying a Foreclosure home in CA.
2.  I've provided everything for the loan to be funded and processed, including to closing funds that have already been wired over 2 weeks ago.
3.  I have had to call everyone involved through every step to make sure that they are doing their job.  Which they have not.  
4.  Currently, the Lender is ready fund the loan and record on the same day.  
5.  The Loan Docs have been signed forwarded to the selling REO bank's Rep.   They claim to be missing the Title Doc.
6.  Escrow claims that they have "requested" the Title Doc and claim that is all they can do.  Escrow claims that they don't even know who it is supposed to produce the Title Doc since there is a 3rd party Selling REO bank Rep. in the middle.  
7.  The selling agent claims that the third party Rep is ready to return the HUD, but is also waiting for the Title Doc.  They have had the HUD for more than 72 hrs, which is what the contract states as minimum time frame needed for turnaround.  Still no turn around.
8.  The contract states that we should close no later than March 12, 2009.  This date has passed.  It also states that I would be responsible for a $50 per diem for each day past that date if I was responsible for a late close.

Questions:
1.  Isn't the seller ultimately responsible to produce a title even if they have a 3rd party Rep.?  
2.  How is it that a seller (being a bank) seems exempt from being held accountable for holding up the close of this sale?  Shouldn't they pay me a $50 per diem?
3.  Shouldn't the seller be held responsible and required to compensate for pushing this sale past the close date if they are found to be responsible?
4.  Shouldn't Escrow (title company) be able to obtain the Title docs within less than 30 days (Although it's been more than 60 days)?  If so, would Escrow be considered the bottle neck?  Then, they should compensate?

In closing, to further explain my situation.  We are in limbo with a lease pending terminating.  Not to mention that we have missed planned vacations and worked around this close date.  The date has passed, so we've lost work income and used up vacation for no reason (it was planned for moving).  We need to know who is responsible to provide the Title Docs and if we can get compensated by the responsible party?  This is costing us time and money everyday we go past the original close date.  Also, no one can seem to give a REAL close date, because no one knows when the Title Docs will show up.

I know this is about as clear as mud, but I've explained what I know about our situation.  I've had to call everyone involved myself to try to make sense of this. So far, I've spoke with the buying agent, selling agent, escrow agent, funding manager, REO bank Rep., and the mortgage broker  just find out that everyone points the finger at one another as to what the hold up is.  I'm still confused and need help to know what I can do to get these people to do their jobs and maybe get someone to compensate me for my time, missed work, vacation, and extra rent while we wait.

I sincerely thank you for any advise,
Mike

Answer
Questions:
1.  Isn't the seller ultimately responsible to produce a title even if they have a 3rd party Rep.?  

I'm not really sure what a third party rep is for title.  Whoever is listed as the title agent on the contract is responsible.  Call that person directly yourself and find out what the hold up is.

2.  How is it that a seller (being a bank) seems exempt from being held accountable for holding up the close of this sale?  Shouldn't they pay me a $50 per diem?

Banks take their time because they're overwhelmed right now, and because they are losing money.  You could have asked for the per diem but they would have denied it.  You're basically at their mercy because you're buying a foreclosure.  

3.  Shouldn't the seller be held responsible and required to compensate for pushing this sale past the close date if they are found to be responsible?

Only if it was in the contract.  Again, you're at their mercy.  Be thankful it hasn't gone months, which I've seen happen.  Your only option would be to send them a "Notice to Perform" which would allow you to cancel, but if you want the house, that's pointless.

4.  Shouldn't Escrow (title company) be able to obtain the Title docs within less than 30 days (Although it's been more than 60 days)?  If so, would Escrow be considered the bottle neck?  Then, they should compensate?

Title can be obscured in foreclosure situations - there are a lot more issues with getting title insurance on a foreclosure.  They have to check for liens and judgments.  It's actually a good thing if they are doing their due diligence.  I had a foreclosure close and then we found out about a lien, and the Buyer had to clear it.

Unfortunately, no one is going to compensate you for late closing.  Your only option is to cancel, which you can threaten.  This is the way the foreclosure business works, and that's why so few agents will actually involve themselves in these sales.  There is a lot of liability and very little reward for everyone involved (except the Buyer who gets a good deal).  Sorry you have to deal with all of this.  It sounds like you need to talk to the title agent directly, since that is where the hold up is.  If you start telling everyone involved that you're going to cancel then hopefully they'll start acting.

Best of luck,
Lori