Maybe this is happening more, and my first time, but...My client is in a multiple offer situation on reo home. We just received an addendum, stating that the buyer has made an offer above listing price. If the appraisal comes back at listing price, buyer agrees to pay the difference between offer and list at the closing from personal funds...Can the bank override the fha clause that states that property must appraise at ....xxx...? Technically, does the fha addendum not say that the property MUST appraise at xxx in order to secure the mortgage, and therefore any side agreement is moot? They have demanded response by Monday at 2 from all bidders.
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Just got the answer from a Wells Fargo underwriter. They would never allow a loan to go through with this addendum, it is, as i thought, circumventing FHA..so will not happen!
That would best be answered by a real estate attorney. I know that addendums will over ride the main contract and I would guess that since the FHA amendment is an exhibit of the main contract then there is a good possibility that the bank's addendum will over ride it.
When dealing with REO properties it's always a good idea to request the addendums before submitting any offer as they can change the entire deal greatly. Most banks use them but there are a few that do not. And keep in mind that the addendums are written by the Bank's attorneys to protect the bank.... not the buyer.
Thanks Steve, I am thinking that an FHA underwriter would not allow the new addendum to 'rule' and find it inadmissable. I guess that would not be a legal question per se, but an underwriting issue...I am passing it off to my lender also, to see if she can run it by their underwriter..but I doubt we will have an answer by 2!
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When dealing with REO properties it's always a good idea to request the addendums before submitting any offer as they can change the entire deal greatly. Most banks use them but there are a few that do not. And keep in mind that the addendums are written by the Bank's attorneys to protect the bank.... not the buyer.