bubbleinfo.com

And if you'll notice, that form hasn't been updated since 3/06.

It's a wonder they've sold any REOs in the last two years!

That's an interesting kicker!! What situations can cause the previous owner to cause a redemption!

Indemnified against having saleable title? Whhooo whooo, that'll stand up yessiree. Can I start selling houses I may not hold title to?

I'm an attorney, and if that thing got sprung on me, I'd walk. Given Countrywide's bad reputation, this is probably enough to keep me from ever even going to look at a Countrywide REO property.

The redemption thing is not a biggie unless the property was taken back through judicial foreclosure. This is not the situation with forelosures right now. As a practical matter, I believe it would only come up as an issue if the equity of redemption was identified as an exception in the preliminary title report. I don't think a foreclosed owner's equity of redemption is a standard exclusion under ALTA policies. If I had a judicial foreclosure situation, I would check.

My answer would still be "no," and I'd add, "property to be verified as vacant by buyer prior to close of escrow." I don't think there's a house anywhere in SD County that could cause me to answer any differently.

In previous threads I have said that despite falling prices there are still circumstances under which it can be "the right time to buy." Maybe if I was some sort of investor or flipper it might make business sense, but if I was someone in the market to buy a home to live in there are NO circumstances under which it could ever be the right time to accept this addendum.

Ridiculously one-sided? The buyer needs a substantial discount in exchange for legally giving so much up, but it sounds like CW is not budging a whole lot on price.

LOL,

So Jim, if I read this right, Countrywide won't object or do anything if I move in prior to close of escrow.

Problem solved!

So what do you do if you get to the real estate office to sign the documents and decide that that agreement is not acceptable? Do you lose your deposit?

Addendums like these come attached to seller counter-offers when you make your bid. If someone tried to drop this on the table at a closing sign-off it would become the center of a discussion about specific performance of the existing contract.

Yes, this is the first and only piece of paperwork that comes from CHL. The realtors are still obligated to inspect and disclose anything they know, so we'll add a few more forms, but literally you'll get the whole package from me the first day.

For example, an offer came in on the toboggan house this morning, the seller countered full price, the buyer countered, CHL agreed and sent the addendum to me, wifey added the disclosures and the buyer's agent had the whole package by 5pm.

At least we're willing and able to handle our business promptly, which hopefully takes some of the frustration out of it for the buyer.

Agreed Kingside on the redemption - when the property is obtained through trustee sale I don't think there is any redemption possible - maybe the IRS? Naw, that's a personal lien, isn't it?

Why is it included if it doesn't apply to any of the cases?

But if you're the buyer and read that far, are you going to pause for at least a second? Probably, and it could be the last straw (kicker).

Frankly, I find the whole tenant BS, BS. They've foreclosed and leave that disclaimer to leave you open to any two-bit hack that wants to squat.

I can already foresee the little fraud mini-industry kicking up of renting the place the day before you get foreclosed just so the rentee can extort buyer.

The reason for redemption rights existing has to do with the peculiarities of judicial foreclosure sales. The usual reason a lender will pursue judicial foreclosure is to get a deficiency judgment against the borrower. Once the lender gets a court order for sale, the lender then has some incentive to credit bid or sell the property for as little as possible to get as large as possible a deficiency against the borrower. By giving the borrower the right to redeem the property for a year after the sale at the sale price plus costs, the lender will not want to sell it for an artificially low price. This is the reason statutory redemption exists as created in the depression era.

As there is no deficiency in trustee sales, there are no redemption rights. An IRS lien would show up on the prelim.

The vague thing about paragraph 15 though, is that the statutory redemption price will not be the same as the REO price if the rights were ever exercised. This is not covered at all by the CW addendum. Would be kind of interesting to see who pays what if a redemption were ever to happen. The lawyers would make out pretty well.

Thanks for posting the CW addendum.

My counter will be that the seller pays for a ALTA title policy, heck I'll even use their insurer.

Who would sign this ‘enclosure’?
The Buyer is giving up all of his recourses.
With a Seller insisting on these terms, the Buyer would get better odds in Vegas.

I'm not in your area but if I were I would pick you as my realtor. You seem like the most honest realtor I've come across and I thank you for that.

There is only one thang I find as a fault. On your listings when you post "just sold", they're too old. Let em go.

I wish you nothing but prosperous times during this recession.

Melody

What is paragraph 1-H all about? How can the buyer wave the right to get out of the sale if he doesn't like the condition of the house. Isn't that what the inspection is all about?

This is "pig in a poke" language designed to do away with all the inspections. I might consider signing this - if a house was up for sale on eBay with a $1 starting price and no reserve.

I can't believe nobody commented on Item #18. I don't like this one at all. Being an Escrow Officer, I don't know of anybody that would actually deliver "all funds due the Seller from the sale" prior to closing. WTF? Jim, do they really ask for this?

Also, if there are tenants in the property, couldn't you just ask in your purchase agreement they they are given notice to vacate 60 days prior to closing? All problems solved.

Angela

Angela, wouldn't "closing agent" be the title company, i.e., you...?

I'm sure one could call for the property to be vacant prior to closing in any offer (I know I would, assuming I'm not buying rental property, which I don't); whether the bank wants to make the sale enough to agree is another matter, and right now they don't seem to be in all that much of a hurry.

Oh, never mind. I just re-read it (I was in a rush before). The funds from buyer are to be delivered to closing agent. I read it as to the seller. My bad.

Angela

One really annoying thing about this addendum is the fact that much of it just restates things that would already be covered in a standard contract but in different wording. Just how many real estate transactions can anyone think of in which closing took place when the funds due to the seller had NOT been put into escrow?