How long does the banks take to extend a short sale if missed the closing?

user9167001
Contributions:4

I missed the closing because the lender was not cleared on time. I have been waiting for almost a month and no answer yet. Is this a normal procedure? or am I being penalized for this?

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October 16 2012 - US

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Answers (6)

Nancy Krantz, "PIK ME"
- (3 reviews)
Contributions:53

No, this is not normal. It's not really a matter of irritating the bank or punishment for missing a scheduled closing date, but there is a procedure, and you do need to have extensions in writing. The approval letter issued during the short sale negotiation outlines all conditions for closing including the date to close. If for some reason you are not able to close on time, you must submit for an extension in writing before the approved closing date to stay in contract. You can request 10 days, 14 days, 30 days ...or whatever you believe to be the safest amount of time it will take to have all your ducks in a row. If the bank accepts, they will issue a new approval letter with the new date. However, if you are one month past your originally approved closing date and your agent has not submitted for an extension and received a new approval letter, you will not be able to close. You may get stuck starting the entire process over again. Your agent should call the bank negotiator and try to correct the situation as soon as possible.

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October 16 2012

user9167001
Contributions:4

Thank you for the replies, I am at the mercy of the sellers and have to wait patiently. Thanks again for your time.

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October 16 2012

Linda Strasberg, "L Strasberg"
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Contributions:2563

extensions are granted to the listing agent of the short sale subject to it being disclosed by the buyer's lender if a set closing date requires an extension and the newly requested closing date falls within the servicers and their investors guidelines...

valid reasons for delay must be outlined and provided by the buyers lender to the listing agent before the extension is approved by the servicer

I believe a maximum of 2 extensions are permit-table for a given transaction or a new buyer should be put on the deal

I have had extensions granted in 1 day with valid lender documentation stating when the property will close and why the delay.

everyone needs to be on top of the transaction to have a successful completion of a short sale

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October 16 2012

user9167001
Contributions:4

Thanks for the reply, I think I did piss them off. I know it was my lender's fault but the sellers are banks and they know how the system works now with getting a loan. Its really hard for a simple guy to get anything done without going through obsticles. Thanks

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October 16 2012

Michael Emery, "MikeEmery"
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Contributions:8059

Was this YOUR lender (assuming you are buying) or the lender that holds the mortgage. There's a difference.

The listing agent / owner should've received documents from the lender that holds the mortgage (or their representative) that spells out what happens should you miss the scheduled closing date. In some cases they charge a per diem penalty for every day missed. In other cases they can cancel the agreement for short sale. Or they can do nothing at all.

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October 16 2012

Tim Moore & Rachel Neal, "Outer Banks N C"
- (2 reviews)
Contributions:1311

Sounds odd. How long after the closing were you ready to close? If just a day or two it should have been easy to just do it then. If longer the bank might wish to go back to see if they need to redo paperwork. That can take some time, but you should hear something pretty quickly. I think you pissed them off.

tim