I'm a Realtor out here in Las Vegas and ran into the weirdest and saddest thing ever at a closing table. From some Facebook marketing, I ended up with a buyer looking to purchase a home in a cheaper, lower class neighborhood than I'm used to. No problem; we find a home, get it under contract, $180k with an FHA loan. We get him set up with a temporary Nevada specific program that was incredible, giving him 10% in free money due to the zip code the home was in. Appraisal came up way short, $158k with all kinds of conditions. I was able to negotiate seller lower purchase price to appraised value. Seller had no money, but did have some equity. So I used the good will I had with some contractors to put a new roof on, new full exterior paint job, HVAC repair and some other odds and ends; and bill to escrow (so they'd get paid once we close), total about $5500 in work. I handled all coordination...it was sellers agent's first deal, he didn't have any idea what to do. Without going into all the details, this was extremely challenging to get to the closing table, but we finally did.
So we're at the closing table. Loan officer is there, buyer, myself and escrow officer. Buyer signs escrow documents. When we get to the loan documents, he proceeds to sign exactly:
First name, Last Name "Without Prejudice" UCC 1-308, 1-207 Accepted for Value X/XX/20XX.
Your best bet is to probably google this to find out what it means...
We tell him this will not be accepted, only his name can be on these documents. The lender will not, and did not, accept these docs signed like this. He leads an extensive discussion about the "entity" and the "institution" against him (which is the bank). He tries to site a lot of different legal jargon, which was out of place and made no sense. Myself, the loan officer, and escrow office all tried to reason with him. It got really tense and heated, he wasn't going to budge, this had to be part of his signature, not negotiable.
There was no logic that could sway him. The fact that he was to lose $15,800 in free money. The fact he was going to lose his Earnest Money. The fact that the contractors I vouched for, are now not getting paid; because he needs to protect himself from the entity that is after him. He tells us we don't understand how things really work, but he does.
Anyway, he insisted on signing all of the docs like this. And the lender immediately rejected them after the signing. He tells me he's happy with me and the loan officer, but the institution that is the bank is corrupt. He's claiming discrimination from them by not accepting his signature. He's trying to direct me to obtain certain forms from upper management in the bank. I finally just said you gotta get yourself a real estate attorney, this is out of the scope of what I can do.
I'm looking at the numbers and trying to see if I can make a deal "subject to the current mortgage" work and purchase the home myself. I could take care of the contractors then. The deal is pretty thin though. The worst thing for me is leaving the contractors hanging.
Any thoughts or input or advice out there?
