The jist of the matter is that although this is a violation of the terms of the deed of trust, the probability of the note being accelerated is small.There was a time when interest rates went very high (in the teens) and many mortgages were in the mid single digits.

You simply can not do what ever you like in any kind of real estate contract.....depends on what you "like".For example, you'll be violating HUD regs which carry the weight of law if you put a tennant in a rental under Section 8 and count any of those funds toward a purchase price.Having someone waive financing contingencies in a sale contract is one thing and while it certainly is not illegal to do so, you have certainly placed a limitation on the buyer.

The bank ended up giving the clear to close after a few days of debating whether or not the fannie mae 3 month deed restriction was violated by accepting a purchase offer during the 3 month restriction period. 

Violations in Regulation Z, Regulation AA or RESPA have always been around and still take the top of the list.

Violates due on sale clause in old mortgage.3) Seller owns a property with outstanding mortgages.

I want the sellers that are distressed in some way: code violations, problems with capital, or just plain tired of being landlords.

Jerrold, Here in Chicago there are a lot of big companies that somehow have relationships with the city to take control of properties that have violations as the receiver.

Ok, I get it now I called my local REC they told me if I try and sell/buy a property to anyone but myself I am in violation of state law.

If I do not get my monies returned soon, I may find it necessary to file a complaint with HUD for RESPA violation, but I certainly do not want to do that without being certain of a business affiliation between the two companies (I did not see Orange Coast Title) on B of A's public 10k report, so I assume it is not a subidiary of B of A.

I'm guessing the pet damage replacement precedent might come from cases where the tenant was in violation of a no-pet policy in the lease.