Preliminary HUD1
After you get the approval letter from the lender for the short sell amount, do they ever see the actual HUD? Wondering because I have gotten into the lazy habit of completing my preliminary HUD1 (net sheet) as a cash sell with the buyer paying ALL closing costs. Just makes it easier to complete. Well, I definately will not be paying cash and wonder if that could stop the deal. Does it matter as long as they get their approved amount?
Also, you read where the primary lender sometimes puts a limit on the amount that can come from the sell for other liens. As long as they get their net, do they really care, and will they find out if you do pay them more than $1000 from the closing proceeds.
Brenda
The terms and conditions that the mortgagee will agree to a short sale will be carefully articulated in their written, short sale approval.
Usually, the specific Purchaser, the sale price, the net recovery, and disbursements will be in the form of instructions to the closing entity (attorney, title company, etc.).
Usually, the mortgagee will NOT release their lien unless/until their implicit instructions have been followed to the letter. They scrutinize the final HUD1 as provided by the closing entity. Any deviation from their terms of approval can result in the rescinding of their short sale approval.
Of course, sometimes things can slip by due to the sheer volume of settlements.... but any errors can and are often revisited once uncovered by auditors.