Lender foolishness!
Just was TOLD by the lender on one of my deals that our contract is unacceptable to the 'lender' because the seller is written as 'Owner of Record'.
This has been a standard practice in our area since the dawn of time. It is 100% acceptable to the buyers and sellers attorney's, the parties themselves BUT NOT THE LENDER.
So now, I have to MODIFY an accepted contract to display the sellers names both on the 'Owner of Record' line and then on the signatory line as their signatures are 'not legible'.
Who's handwriting is legible these days? Who's version and who's standard? Legible to the nun in 2nd grade who taught me penmanship?
This just defies logic and is another way the lender has injected themselves and thinks they are a party to the contract.
Has anyone else heard of this 'new requirement'? OR ..... Is there someone at the 'lender' that's just kinky about penmanship?
Or are they a horse's a$$?
Hi Lyn~ I have never in thirteen years of doing Real Estate seen it done the way you did it. It wouldn't fly here at all. I guess it just goes to show you every area is different.
Underwriters are NUTS! This is just one of many nutty things. I remember once we had a buyer sign loan docs, then they were refused in final UW because they did not seem to match the names (they were not legible perfectly). So they signed carefully and you could now read every single letter....3 weeks AFTER the close, they got a notice that they were being investigated for fraud....Why? because the loan documents did not match the other signatures they had on file...like the loan application. Duh....the loan docs were not the way they normally sign....I mean really!!! It worked out ok....but really?
I think they are just being cautious Lyn. You're dealing with a bank.
Requirements from lenders should be uniform to prevent these things from happening last minute Lyn! I saw an MLS sheet that stated under the owners names...nice people and no one caught it.
I think every closing I've had recently required that the front page be rewritten with the owner's name, usually sending the contract back into underwriting with a bunch of other nonsense so I hadn't singles this out. I guess OOR is now out and we should ask ahead of time the owner's legal names....although for an REO how do you know until it gets through acceptance?
Lyn...I have never seen it done this way either. I think that it is a power play by the lendere just because they can!
Leslie: Being in the same area you know what I mean here. OOR or 'Owner of Record' in this area is the norm. The lender chosen from the buyer is also from this area so what's with the power play?
Bill: I agree, until someone takes these lenders on about their 'legal authorities' this will continue. This was a 100% accepted contract that went thru the attorney reviews by 2 attorneys and they made no changes in that regard.
Carla: There is being cautious and then just being nuts. I bet this lender has plenty of files right now with the same situation.
Karen: Sounds like paranoia! I know that the lenders want every T crossed and I dotted so they can sell the loan but then it just gets little ridiculous. A great example of this would be if someone used their nicknames and their legal names - is that fraud? No way.
Vickie: I guess in Kentucky they are particular?
Lyn,
Never, never would I do Owner of Record - even if the listing agents says to put that. In our areas, attorneys review contracts and they wouldn't let it fly anyway. One of the reasons I love AR - we learn about "common practices" in other areas that we don't do.
Irene: Yep, it's standard in this part of the woods. Attorney's either like it or they don't. Rarely do they change anything. BUT .... this is the lender doing the changes. It's already passed the attorneys.
Lyn ~ here in Colorado, we write in the seller's names on the contract, we do not use owner of record. I guess it's different from state to state. As far as the signatures go, the lender should accept the way they sign. I think the lender is a nutcase on that aspect!
Lyn, I actually had this happen a couple months back. Of course the same underwriter a month later did not ask a different contract to be changed. Of course no one could show me a change in the guidelines which required this.
Last week I had a refinance funding and got a call from the funder. "I think the borrowers will have to resign the docs because their signatures are not legible." My clients were Asian but by no means were they the first clients that did not sign their names in a readable manner. After a bit of arguing with the funder and speaking the funding manager we got our loan funded. How many of your clients sign their name so that it is clearly readable?
Roy, see that is what I am talking about. It's totally arbitrary on the underwriters part. And really, who can actually read people's signatures as you say. There have been no guideline changes and who can really 'enforce' this?
Another point that is upsetting to me is that they want 'someone' to change an agreed upon contract. The buyer & seller can't do it so why can the lender?
Yep Lyn, I've noticed it, think it started this year or end of last, although I believe it might only be FHA, but I could be mistaken. First time it happened, I now leave it blank and let the listing agent put the names in and explain why (in case they aren't aware of it).
Thanks Judy for your input.
Yes I have had this on my last 2 buyers contracts. Not only that they would only let the attorney take care of the changes. he was not thrilled at all! On my thrid I wrote the sellers name. Good for me. Then the sellers got antsy because it was a trust and I should only write OOR. I give in!
Corinne: People think we are nuts but that is way we do it here, or used too. I don't like the idea of changing an accepted contract for the bank that's not even a party to the contract. Bad idea all the way around.