Ex of a Short Sale Double Closing in CA with end buyer financing.

[davidmontano]

Ok, I have a hand full of short sale files on my desk. Clients already agreed a SS is the best solution. I would like to flip these to end buyers, but I want to make sure all ducks are in a row before it blows up in my face. My biggest concern is the number of days apart from the A-B and B-C closings. I have a couple lenders who will fund these.. Both lenders said they wont start to Underwrite the B-C end buyers file until new owner is on title. Which can take a couple days to update the pre-lim depending on how fast the title company is.

So lets say if A-B closes/records on Monday. Has to record with the county, then title can update the pre-lim to show new owner on title. Lets just say that comes in on Wednesday morning...give the updated pre-lim to end buyers lender to UW the file, wait 24 hours for approval, say on Thursday. Now assuming all Prior to Doc conditions are satisfied at time of Underwriting, which they almost never go straight to loan docs, there is usually another 24 hour wait for Loan Docs. So lets just assume it goes straight to docs...Docs come out on Friday, get signed/notorized at escrow on Friday afternoon. Escrow probably wont get to the file till Monday morning. Escrow then balances the file gets it ready to fund, overnights loan docs back to the lender. Tuesday morning, Lender checks the file in, issues any funding conditions on Tuesday afternoon. Assuming file is satisfied with all conditions, it's set to fund on Wednesday, record on Thursday. That about 11days between closings, of course assuming everything goes smoothly, which it almost never does, it could be longer. Loan officer, processor, and Underwriter must have all conditions in and hope for a smooth closing. Not too mention, if you're using transactional funding - what happens if they close the A-B and the loan blows up, or end buyer backs out? Transactional lender ends up with the property. Can someone please give an example and details of the timeline on their successful double closed transaction in CA. Maybe I need to find a lender that can at least Underwrite the end buyers file and push the updated pre-lim showing new owner on title as a DOC or Funding condition. Any lenders out there that can? Lets hear about your closings

[MichaelQuarles]

Good to meet you...

I do double escrows on Short flips and it isnt that difficult...

too much to write here but can be accomplished...

Just know that and move forward...

Michael

[davidmontano]

Michael, thanks for the clarification. So would you say I'm faulting the delays on the title side or the lender side?

[MichaelQuarles]

The issues are complicated..

What you have are underwriters who need to see the seller on the pre... The escrow company must adhere to the Shorts lender when they require that the borrower of the short not to receive funds not included on the HUD1.

The other issue is that the Short lender will not allow transfers prior to their approval...

Therefor you cant pass the deal directly from A to C there must be a B... But B isnt on title... And you cant deed to B prior to completing the short without killing your Short...

Or can you?

There is a vehicle which allows both scenarios to be adhered to...

Good luck

[davidmontano]

So whats the Year, make and Model of that vehicle????

[MichaelQuarles]

BTW the easiest way to skin this thing is to sell for cash....