It’s been happening with unprecedented frequency: more lenders are backing out of funding home purchases at the last minute of escrow than ever before. This can be due to “techinical” issues- nitpicking the appraisal, the clients claims, or just backing out because, in the three day recision period, they simply can.
Can you imagine this EVER happening before 2006? I sure can’t.
Another remarkable thing that has been reported as happening with alarming frequency: sellers having to back out because they don’t have enough cash to make up the shortfall- because they are selling their house short. Their lender won’t let them do a short sale- if they can make payments, then they’re SOL– and they’ve been fortunate enough to find a buyer who will unshasckle them from their property, only with a significant discount over what they paid.
But they have to pony up cash to pay off the note, and they just can’t raise it. Perhaps they’re probably maxed out on credit cards. Or worse, it’s beyond their limits. Or it’s a REALLY REALLY HUGE discount.
Anyone out there ever imagine real estate could ever be a chooking hazard?
A big tip of the sombrero to Calculate Risk.