Double Closings

Foreclosures, Short Sales, Tax Foreclosures
1

It’s again an A-B …B-C closing. The investor is buying the property from the bank (short Sale) and will be selling it to me at the same time. Since this is going to be double closings ,investor brings his funds to close the first transaction which is his contract with the bank. Then the second transaction will done with my funds to close the contract with me. Will there be title seasoning issue as property will be flipped on the same day although I am applying for conventional loan? Do I need to hire services of Buyer’s agent or real estate attorney in this transaction?What is it that I should focus on so that I do not get ruined? Appreciate your inputs.

Sam

2

I don’t see any seasoning issues and the Title/closing Co. probably has the Attorney. No Broker required either unless you’ve done a lot of deals. Check with the Title Co. to see if they double closes. Herbster

3

Hi Sam,

You need to check with your lender to find out if they require title seasoning-many conventional lenders do.

Make sure they know that the property is being flipped the same day and find out if this is going to be a problem.

Steph

4

Thanks! Is it a law that requires lender to follow title seasoning ?What are the risks with such kind of transaction? Can I get possession of the property immediately after closing or have to wait until title is transferred on my name?

5

It is not the law. Title seasoning is contingent on lender guidelines. If you close, you should be able to move in the same day.

6

Is it possible to move in the same day or there are title transfer requirements etc…?

7

Double closings are usually done within a few hours of each other. Again, you need to verify with your lender what their title seasoning requirements are. For some it will be 60 days, 6 months, or none at all. I would recommend checking with your local banks, as they will most likely be the ones who do not have specific title seasoning requirements, if any.

Obviously if you are planning on doing a double closing you will need a lender who has NO seasoning requirement at all. Just call around and ask the LOs, they’ll be able to tell you right over the phone.

8

Does someone tell me the name of the lenders who do double closings?

9

There’s a lot of private and/or local lenders that will provide transactional funding for double closings, just check on your local craigslist page or ask around your local REI club, they shouldn’t be too hard to find that way.

10

Google Flash Funding and you should find a few choices for transactional funding.

11

Yeah it would be great if there were some kind of list or database of lenders that do not having seasoning requirements, but I guess this would be difficult as banking policies are changing all the time so probably best just to call around to different lenders.

12

I could of sworn Coastal-funding and Ivisionary do double closings.

13

Does these lenders offer higher mortgage rates or they are competative. I spoke to one loan officer today and he agreed on double clongs however he told me that I need to obtain 2 appraisals. Is it normal for double closings. In addition, is it buyer or seller who chooses title company?

14

you referring to my post??
go to Coastal-funding.com and ivfinancialsolutions.com

15

Here is a short list of Lenders who have funded end buyer B to C transaction in a back to back close. Please ad to the list.

Wachovia
Key Bank
Tower Federal Credit Union, Pennsylvania
Wells Fargo
Equity Home Mortgage
SunTrust Mortgage
Contour Mortgage Corp.
Countrywide Mortgage
Flagstar
First Interstate Financial
Third Federal
Home Savings
Provident
Chase Bank
GMAC
Local Credit Unions are great as well

16

I don’t see any seasoning issues and the Title/closing Co. probably has the Attorney. No Broker required either unless you’ve done a lot of deals. Check with the Title Co. to see if they double closes. Herbster

17

All of these lenders have issue with seasoning requirements on title.I spoke to a broker today and they are ready to do double closing. When I asked them to confirm from underwriter before I lockin. At this they told me that I have to lock in the loan in order to find out from underwriter if they have any objection. Even if a lender is ready to do,as a end buyer what should I get in writing from them so that I do not have face any potential issues during settlement?In addition, what should I get in writing or on contract from the seller so that they should be a problem?

18

Make sure they know that the property is being flipped the same day and find out if this is going to be a problem.

19

With all due respect to Amish56, Do NOT tell the title company you are FLIPPING. For some reason they hear that work and associate it with fraud. Just let them know you are going to to a double close and see if they can handle that.
I have learned the hard way about the F word.

There is nothing fraudulant about the transaction!

20

I assume that you are using option contracts. Fannie Mae and Freddie Mac have both moved in the last two weeks to prevent double closings. Currently, their policies are that the property cannot close again for 30 days. This still makes short sale option selling viable, but not same day closings.
However, even though the two entities are prohibiting a second transaction on the same day, this raises some serious legal issues. It is possible that a title company will refuse to close a short sale transaction where the secondary market investor has included this condition in the bank release document. It will be interesting to see how this plays out in the courts.