Last minute snag with BOA short sale

[Stephen Gathman]

We are supposed to close on purchasing a BOA short sale this Friday, and the title search just revealed that the sellers has a HELOC also with BOA that they paid off one year ago. However, BOA never sent a satisfaction of lein nad my lender won't close without it.
BOA says it will take up to 30-60 days to prepare and send one. The listing agent is trying to get the contact person at BOA to get it done, but all we have heard is that she will get back to the agent.

The HELOC is definitely paid off, so they should be able to produce something.

Any ideas on how to get this done in time?

Also, Georgia allows for up to a 7 day extension in closing. Does extending the closing date usually cause any problems?

What if they don't get it within the 7 days, is the deal dead? What could be done to preserve it?

Thank you for any input.

[Scott Hubbard]

Originally posted by Steve Babiak:

Did the sellers close the line when they paid it off, or did they leave it open? If left open, then it probably isn't truly satisfied; if they paid it off and closed the line so that there are no more draws allowed, then there should have been a satisfaction piece recorded.

Steve hit the nail right on the head. The sellers probably did not close the HELOC down after paying it off.

This is why I always tell buyer's to get into title ASAP and do the title search as soon as you are under contract despite what your REALTOR or title company says. I have seen too many deals get lost to simple things like this.

Since both loans are with BOA, you should not have any problems with getting an extension on the approval letter expiration. But, I highly doubt you will be able to get this done within seven days.

1. The seller(s) will have to close the HELOC account and will likely have to do so in writing.

2. The release will need to be prepared, notarized, and sent to an attorney or title company for recordation.

3. Recordation.

4. Buyer's lender will need a copy of the recorded release for their record or will charge the closing officer with obtaining fully executed and recorded release prior to funding.

Number 3 and 4 is atleast 48 hours and most likely 72 or more. 1 and 2 is anyone's guess but it will be more than 48 hours that is for sure.

So, in my opinion, you will need focus on getting an extension which will allow for a closing extension until the end of next month. That way, you have at least 30 days to work through this problem.