Ask Me Help Desk - GE finance

HI,
Hoping someone can help. We have just signed a contract to buy a house which is financed by GE finance. The owners have agreed to the price and have also signed the contract agreeing to the sale of their property. The problem we are having is that GE finance won't let us know if they are going to agree to the sale of the property as the owners are selling for 40,000 less than their mortgage with GE. Our deposit is due this Tues and we will be paying interest on this. Is GE obligated to release the property for sale if the deposit is paid? We have buyers waiting to buy our house and we sell this house until we can confirm the other property is ours. What do you advise us to do? Are we obligated to pay the deposit on the property with out confirmation from their finance company to say the property will be released..

GE has NO say in the sale of the house unless the owners do not plan on paying off the mortgage at closing. You can expect, however, that GE will not release their lien unless the mortgage is paid in full. So what do the owners say about that? What does your contract say about it? The contract should stipulate that the GE mortgage will be paid in full at closing.

I would strongly suggest getting a real estate attorney to review that contract and the situation. This is an unusual situation but the sellers have to be able to convey clear title to you. That should be in the contract. Conveying clear title means satisfying any liens on the property.

I believe that you are involved in a "Short Sale" situation. The sellers are probably in default on their mortgage to GE. The GE Loss Mitigation Department has to decide whether it is in their best interest to settle for less than is owed on the mortgage, wait for a better offer from another buyer, or take their chances in a foreclosure. If you deposit your earnest deposit with the Title Company or the RE Broker's Trust Account, and GE doesn't agree to the Short Sale, you will get your deposit back, and have to find another house to buy. GE is in the driver's seat. Please let me know if I have completely misinterpreted your question.

As Scott said, Get an attorney. And do not use the seller's attorney. Though he can handle the paperwork for you, he will be legally obligated to look out for his client--the seller! Spend a few extra bucks for someone who is dedicated to your best interest.

Quote:

Originally Posted by Dr D

I believe that you are involved in a "Short Sale" situation. The sellers are probably in default on their mortgage to GE. The GE Loss Mitigation Department has to decide whether it is in their best interest to settle for less than is owed on the mortgage, wait for a better offer from another buyer, or take their chances in a foreclosure. If you deposit your earnest deposit with the Title Company or the RE Broker's Trust Account, and GE doesn't agree to the Short Sale, you will get your deposit back, and have to find another house to buy. GE is in the driver's seat. Please let me know if I have completely misinterpreted your question.

I believe that you are right on Dr D. I have seen a large increase in short sales recently. Bernation, if you have a Realtor, they should be able to tell you if this is a short sale situation.
This information may be in the MLS listing that Realtors use. If it isn't listed in MLS that way, I can pretty much guarantee that the sellers agent has informed your agent that this is the case.
Usually, the sellers agent has talked to the lender to see if they will entertain a short sale, prior to accepting an offer that is less than the pay off. Once an offer is made, it takes a week or so to get an answer from a lender, as they may have to submit the offer to a committee.

I hope this sheds some light.