This Short PayOff contract makes no sense

[Greg K.]

Has anyone ever seen such a clause in a contract(approval letter with terms) for a hardship based Short Pay, or even for a Short Sale?)

"Dear Customer(s):

Select Portfolio Servicing, Inc. (SPS), the mortgage servicer on the above referenced account, received your request

to accept a compromised payoff from the proceeds of the refinance of the above referenced property, or “Short

Payoff.......

****

.1. SPS must receive the net proceeds from the Short Payoff in an amount not less than [redacted] no later

than [redacted]  (the Closing Date). The net proceeds must be in the form of wired funds or certified

funds, and must be made payable to Select Portfolio Servicing, Inc. No personal checks will be accepted.

Wiring funds is the preferred method of payment, and instructions are attached.....

***

 3. In consideration for SPS’s agreement to accept the Short Payoff, in no event shall you receive any funds from

the Short Payoff (unless otherwise approved in advance by SPS). Any surplus funds above the agreed upon

net proceeds at the time of closing are the exclusive property of SPS, and you agree that any such funds will

be remitted to SPS, made payable to Select Portfolio Servicing, Inc........

***

...Provided that all terms and conditions set forth above have been satisfied, written confirmation that the payoff funds are in

Escrow along with a final HUD-1 Settlement Statement/Closing Disclosure shall remove all conditions of approval for

this Short Payoff.  Upon satisfaction of all terms of this approval, the mortgage will be discharged in its entirety with any deficiency rights

waived, and a lien release document will be forwarded to the appropriate county for recording......

”

Usage of the word 'you', obviously, refers to the current borrower who is in default.  The Hardship affidavit sent in is quite true and quite tragic.  For whatever reason, they would keep sending out a BPO agent who would value that property, WAY below its true value.

The borrower is a senior citizen who purchased this property in 2006 with all the worst terms and situations of those times, and because of a failed attempt to modify, and an attorney's advice to stop paying, the full Payoff Quote they provide is far more than what the house was bought for, and $145,000 more than the figure they are willing to dismiss the mortgage and liens for.

Truth is, the house has appreciated significantly, because the borrower chose a very smart area to purchase the house.

Because I absolutely refuse to violate any laws when conducting real estate business, AND because I'm trying to get some money for the borrower and myself as well, without having to worry about deficiency suits, etc.

I TOLD THEM THE TRUTH

and said that their BPO's are coming in low.

"Actually Sir, Since you have been approved for Short Sales(in the past) and this Short PayOff right now, it's in your best interest to have a BPO come in below market value".:  - Said the customer rep to me on the phone.

So I said that I will help sell the property, easily obtain more, and keep the difference.  "Is that ok?" , for the 3rd time I asked, since the language of the terms seem odd and contradictory,.

The first two times the response was "Absolutely fine.  We just want our $XXX.XX and after that we don't need to know, nor want to know.

Now that I have the property listed and am showing it, I called once more to double check, and the rep said the exact opposite, but that I should contact the liquidation department if I need any edits or additional clauses added to the agreement.   But was told it was very unlkely.

I need either a very unusual P&S that would tie in this payoff, together with the profits. Verbally, the reps told me this would be totally ok.

Now the deadline is nearing.  I am NOT trying to solicit free legal counsel. I have an attorney who said "Get them to draft a different agreement.  No one is just going to put up this much money(most of the $899,999 asking price it's listed for), by simply wiring it over to the bank.

Anybody have any clue what is going on here?  More importantly, what sort of contract or legal instrument or security instrument could I use to make this deal happen?

There must be a creative and legal way to do this, a nudge in the right direction would be deeply appreciated.

-Greg