I’m working on a short sale, where the bank who is holding the mortgage in default, has accepted the buyers offer. Howver the bank has only provided a letter stating the minimum dollar amount they would accept for the property. No signatures/initials were provided by the bank for the contract that was submitted.
Is this common for banks not to sign contracts? If so, why?
The banks do not sign the contract. The contract is between the buyer and seller and should have their signatures only. The bank is only giving their approval to sell the property for less than what is owed.
Ruben is correct The letter from the bank is equivalent to a payoff letter in a normal transaction. Only the principals in the transaction will have to sign the contract. The bank is a lien holder and not a principal.
The only time you will see banks signing contracts is on REO (real estate owned) deals which they have taken back through foreclosure or deeds in lieu.