Closing Nightmare

[Ordinarypeople]

Seller needs advice to avoid another closing nightmare

Seller needs advice to avoid another closing nightmare What is the name of your state? FL My wife and I went to close on a property we owned in FL. The original contract selling price for the house is $197k with $2500.00 total in closing cost resulting in a seller net of $194,500.00. Two days later, the buyer comes back with a new proposed contract changing the selling price to $240k, and indicates he would get a loan for the house at $240k and would like to use 39k to expand the small master bathroom.

My wife and I agreed to the proposed contract. The buyer who used a mortgage broker( that also owns a construction company) told the lender this 39k should appear on the HUD as a construction loan with the 39k proceeds showing on the HUD going to the Mortgage broker aka Construction CO. This Construction CO has also provided the buyer with an invoice for the renovations totaling 39k.

It's closing day, the lender tells the title company they must remove the line item on the HUD with proceeds of 39k to this Construction CO. They instruct the title company that all proceeds must be made out to the "seller", that's my wife and I.

Well, we don't want to be liable for the taxes on 39k or captial gains(any advice??) associated so I request this construction company to provide my wife and I an invoice and request the title company to cut a check to the construction company and list it on the HUD as paying off an "unrecorded lean" at the suggestion of the title company.

The lender sends the approval number or code to the title company approving us to move forward with this transaction...Friday at 4:30 pm

WE CLOSE...I GIVE MY KEYS TO THE BUYER, SIGN ALL THE PAPER WORK AND RETURN BACK TO GA WITH A CHECK.

The next day(saturday-Sun) , the new owner starts the renovation in the bathroom in the house (knocking down walls, tile,plumbing).

On Tuesday, 3 days after closing, I get a call from the title company saying the lender has pulled the funding for this closing. The title company put a stop payment on the checks that were issued ....and essentially washed there hands of it...ADVICE???

As the seller, I now have a damaged house back...What legal rights do I have at this point? This was the most humiliating experience in my life.
Is there some guiding body for title companies or lenders I can report this behavior to? Have I done something wrong???

We are just ORDINARYPEOPLE...THANKS in advance for ADVICE

 

[seniorjudge]

The original contract selling price for the house is $197k with $2500.00 total in closing cost resulting in a seller net of $194,500.00. Two days later, the buyer comes back with a new proposed contract changing the selling price to $240k, and indicates he would get a loan for the house at $240k and would like to use 39k to expand the small master bathroom.

This is a scam and it looks like you helped them do it.

 

[Ordinarypeople]

If it was a scam, then why did a closing occur??? I need advice not cynicism...

 

[HomeGuru]

If it was a scam, then why did a closing occur??? I need advice not cynicism...

**A: closing occurred because the title company and lender were tricked by you and the Buyer into fraudulent dealings.

 

[seniorjudge]

Q: What legal rights do I have at this point?
A: Yes, re-sell the place.

Q: Is there some guiding body for title companies or lenders I can report this behavior to?
A: Based solely on what you say, the title company and lender did nothing wrong.

Q: Have I done something wrong???
A: Yes. See your original post for a list of things you did wrong.

 

[HomeGuru]

Q: What legal rights do I have at this point?
A: You have the legal right sell the place to a more honest Buyer at say $197,000.


Q: Is there some guiding body for title companies or lenders I can report this behavior to?
A: what behavior? They should be reporting your deceptive and fradulent dealings.
*******
Q: Have I done something wrong???
A: DOH!

 

[UNCLEBUCK]

Ordinarypeople,

Were you, or the Buyer, represented by an Attorney to handle the closing?

HomeGuru,

Ingnorance is generally not an excuse in the eye's of the law. However, in a discussion Forum such as this, suggesting that a Forum member should be reported for deceptive and fradulent dealings does nothing to help anyone. Also, may I respectfully suggest you refrain from using responses such as 'DOH!' to answer a question. It cause's your intelligence to come into question.

 

[nextwife]

Personally, I don't understand why they made this all so complicated. I see improvement/purchase mortgages legitamately wrapped together all the time. The selling price is X, and the loan adds another Y dollars above that (usually disbursed via draws through the title compay) based upon the construction/material budget submitted for the work, plus an added padding for unanticipated expenses. This is able to be accomplished without resortin g to a misrepresentation of the sales price.

 

[seniorjudge]

Personally, I don't understand why they made this all so complicated. I see improvement/purchase mortgages legitamately wrapped together all the time. The selling price is X, and the loan adds another Y dollars above that (usually disbursed via draws through the title compay) based upon the construction/material budget submitted for the work, plus an added padding for unanticipated expenses. This is able to be accomplished without resortin g to a misrepresentation of the sales price.

You are correct. As I said, Ordinarypeople were/was scammed!

 

[flinching]

If it was a scam, then why did a closing occur??? I need advice not cynicism...

ordinarypeople, sorry about what happened to you. this isn't my area at all, so i don't have any advice for you. and unfortunately.......you won't find ANY solid advice in these forums. remember, nothing's free. and people like homeguru are a joke. he's a guru of NOTHING. he's about as useful as the lint in my dryer. what i'm saying to you is that, you can get up right now, walk into your laundry room and ask the same question to the lint in your dryer.....and you'll get your questions answered in no less a manner than you will on these boards. you'll be just as enlightened after asking your lint these questions....that you'll be asking anyone on these boards.

i don't even know why he spends his days on these forum boards posting meaningless post after meaningless post. he must be bored and doesn't have anything better to do. maybe you will just have to pay some money to a lawer for an hour of his time and advice with this one. good luck to you.

 

[nextwife]

A closing evidentally occured because the title company was sent both funds and a closing package. IF they closed in accordance with their closing instructions, they would have had no way to know that the loan package was not going to be approved upon close scrutiny by the loan investor - who evidentally pulled the funding authorization after the fact.

 

[UNCLEBUCK]

Quote from seniorjudge:
You are correct. As I said, Ordinarypeople were/was scammed!

Here is the actual quote seniorjudge is referring to:

"This is a scam and it looks like you helped them do it."

 

[seniorjudge]

Quote from seniorjudge:
You are correct. As I said, Ordinarypeople were/was scammed!

Here is the actual quote seniorjudge is referring to:

"This is a scam and it looks like you helped them do it."

You are correct; scams require a willing victim.

 

[HomeGuru]

ordinarypeople, sorry about what happened to you. this isn't my area at all, so i don't have any advice for you. and unfortunately.......you won't find ANY solid advice in these forums. remember, nothing's free. and people like homeguru are a joke. he's a guru of NOTHING. he's about as useful as the lint in my dryer. what i'm saying to you is that, you can get up right now, walk into your laundry room and ask the same question to the lint in your dryer.....and you'll get your questions answered in no less a manner than you will on these boards. you'll be just as enlightened after asking your lint these questions....that you'll be asking anyone on these boards.

i don't even know why he spends his days on these forum boards posting meaningless post after meaningless post. he must be bored and doesn't have anything better to do. maybe you will just have to pay some money to a lawer for an hour of his time and advice with this one. good luck to you.

**A: what's a lawer?

 

[HomeGuru]

Quote from seniorjudge:
You are correct. As I said, Ordinarypeople were/was scammed!

Here is the actual quote seniorjudge is referring to:

"This is a scam and it looks like you helped them do it."

**A: and I agree with that actual quote.