Short Sale Gone Bad

[selym]

My jurisdiction is: Rhode Island

Hi all,

I placed an offer on a short sale property in early December of 2008. The real estate agent was handling the short sale himself. The bank countered my offer after a BPO came back slightly higher than my offer, so I accepted the price they wanted. Purchase and Sales Agreement was signed by both parties. There was a second mortgage on property that the agent said had been settled, and on the P & S it stated that the second mortgage holder would receive $0.00.

After signing, I felt it was safe to move forward and order an appraisal, get an inspection, apply for a mortgage, and begin packing up my current residence. Two days before closing the legal team handling the close cancelled it because the second mortgage had NOT been addressed. I was very upset and it escalated to both brokers getting involved. I signed a 30 day extension for them to hire a short sale attorney and try to work this out, but in the end the second mortgage holder would not budge.

The agent/broker know what they did was negligent and they offered to refund my deposit as well as the funds I paid for my appraisal and inspection. All I had to do was sign their form, which I did. That was a few weeks ago. My agent told me today that they decided to have me sign a new form instead that will cover them legally from me going after them.

My funds have been tied up for 7 months now. I am livid to say the least. I had locked in a rate of 5% on my mortgage, so I stand to lose thousands of dollars (over $12,000 last time I checked the new rates) on a new mortgage. This whole process has pushed me to the edge and now I have such a chip on my shoulder about this situation. I'm ready to fight them. I just need to hear whether or not it would be worth it monetarily or not.

Throughout this entire process there has been frustration after frustration (general rudeness, verbally abusing and bullying my agent, losing forms and needing them resigned, needing a new deposit check, etc.) with the sellers agent which is partly the reason I am willing to push forward.

Any thoughts or opinions would be greatly appreciated.

Selym

 

[dee_dub]

The agent/broker know what they did was negligent and they offered to refund my deposit as well as the funds I paid for my appraisal and inspection. All I had to do was sign their form, which I did. That was a few weeks ago. My agent told me today that they decided to have me sign a new form instead that will cover them legally from me going after them.

Slow down.

Did you and them enter into an agreement that they would refund your deposit and out of pocket expenses, or not?

What is this new agreement? They don't get to "decide" what you are going to do. They might want you to sign something, but have you actually entered into it?

My funds have been tied up for 7 months now.

Why haven't your funds been released pursuant to the above agreement?

Any thoughts or opinions would be greatly appreciated.

Get your money back, which is what you're entitled to, and wash your hands of the affair. Your claim to damages for losing your locked rate mortgage won't fly.

 

[selym]

Slow down.

I know (hope) you probably didn't mean it this way, but those two words came off as having a very insolent tone. As I know it is very easy to misinterpret words and true meanings on here, I will assume that I am the one misinterpreting.

Did you and them enter into an agreement that they would refund your deposit and out of pocket expenses, or not?

The agreement was that I would purchase the property and it fell through because they attempted to perform a short sale without the the know how "in order to save money." (those last five words were the sellers agents words, not mine)

As per the agreement, I am entitled to a refund of my deposit.

What is this new agreement? They don't get to "decide" what you are going to do. They might want you to sign something, but have you actually entered into it?

No new agreement, just a new release to sign. I was told that they were going to refund my deposit AND include my out of pocket expenses in one check, and they gave me a standard release stating that I was receiving my deposit back. I signed and returned it. That was a month ago.

Now I am told they want me to sign another document instead which has more legal disclaimers and such. (They are apparently trying to protect themselves from being sued) It's kind of put a chip on my shoulder as none of this has come easy.

By the way, they didn't "offer" to pay my expenses. We (myself, my agent, and my broker) had to fight for it. If it were up to me, I would still be buying this property at the agreed upon price in the signed purchase and sales. They represented themselves as being competent in handling a short sale which they unfortunately were not. I guess I should be happy they have agreed to pay my out of pocket, but it still steams me that people like this are allowed to operate. Sadly, I will end up paying many thousands of dollars more in interest over the course of my mortgage because of their negligence.

Why haven't your funds been released pursuant to the above agreement?

See above. They want me to sign a new form now basically saying I won't sue them.

Get your money back, which is what you're entitled to, and wash your hands of the affair. Your claim to damages for losing your locked rate mortgage won't fly.

I had a feeling this would be the answer I was going to get, but thanks for confirming it. It's been a long, ugly road with these people and it stinks to not have a way to punish these folks. Oh well...I could always go the website route chronicling my experiences. Thank you very much for your time.

Selym