Countrywide Addendum - Posted by redave

Real Estate Investing
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Posted by redave on May 05, 2007 at 17:22:05:

Bill,

Thanks for your response.

Of course a lender shouldn?t be liable for something they don?t know about, and it?s fine they are offering the property as-is. It?s the part about not allowing a buyer to cancel if the inspection reveals problems, and the part about no specific performance, and the part about no jury trial, and the balance of the 16 pages that?s a problem. Not that it really makes a difference to me, it?s the principal that matters. If I did make an offer it would be low enough that these things don?t make a difference.

There?s nothing wrong with trying to read, discuss and understand a contract you are considering signing, most people would even recommend you do so, even if you don?t pay an attorney.

The CA Purchase/Sale agreement and transfer disclosure allows the seller to disclose that they have not lived in the property and therefore have no knowledge about problems, that?s fine. The standard agreement also provides the seller an opportunity to back out if the inspection reveals problems, which this addendum is overriding, not good.

Lenders are taking a look, but not a hard look, imho. They are trying to appease the public and congress, nothing more. They may even refinance a few folks into lower interest loans like the say, but it won?t be widespread, not even close; just like they say, it?s not a panacea.

Stop all foreclosures, that?s a good one. All mortgage money would dry up if lenders couldn?t effectively use their collateral to limit losses. Doing anything like stopping foreclosure would severely limit lenders ability to collect on delinquent loans, thus causing a sever shortage of mortgage money thus housing shortages?ain?t going to happen imho. This is all happy talk. I don?t know who these congressional people are but I?ll bet they?re liberals.

Dave

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Countrywide Addendum - Posted by redave

Posted by redave on May 05, 2007 at 11:59:41:

All,

I recently saw a house listed in the mls that I was interested in purchasing, so I asked my agent about it. My agent contacted the listing agent, it was still available and, since it was a Countrywide owned REO property, there was an addendum to the standard purchase contract she would send me that Countrywide required to be completed and submitted with the purchase offer. I said okay, fine.

I?m not an attorney but after reviewing the 16 page addendum, it appeared to me that Countrywide was rewriting the standard purchase agreement line-by-line slanted in their favor.

For Example, there is an escape clause in California standard purchase agreement that allows the buyer to cancel after the inspection should there be problems that weren?t apparent prior to making the offer. Countrywide has this in their addendum that appears to remove this buyer right, ??the buyer further waives the following, to the fullest extent permitted by law?Any right to avoid the sale of the property or reduce the price or hold the seller liable for any claims arising out of or related in ay way to the condition??

Another example, ??the buyer further waives the following, to the fullest extent permitted by law?Any right to a trial by jury in any litigation arising from or related in any way to the agreement?. They also have me waive my right to pursue them for specific performance.

SIXTEEN pages of this stuff. The standard CA purchase agreement is (only) 10 pages. I think they needed an additional 6 pages to legally remove themselves from all possible liability after rewriting the original contract.

What do you?ll think?

Is this how it is with all lender REO?s?

My take is that they know it?s not enforceable (because it?s so slanted) but don?t care, they are Countrywide, if you want to fight they will gladly see you in court with their team of attorney?s.

If I was an agent I?d consider this a breach of fiduciary duty to have my client sign something like this.

Dave

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Re: Countrywide Addendum - Posted by ken

Posted by ken on May 05, 2007 at 19:42:21:

I buy quite a few of these from different banks and this is quite common.Make your offer low enough to deal with any problems

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Re: Countrywide Addendum - Posted by Bill H

Posted by Bill H on May 05, 2007 at 14:22:42:

Slow Down redave…stop and look at the situation from the other side of the coin.

I am not an attorney either and do not play one on TV or in the local theater group.

But I do apply common sense to most situations.

Here you have the lender in the seller position and CA law is very specific that the seller is responsible for all problems/deficiencies/etc. with a property being sold.

IMHO all that Countrywide is trying to do is say…“Hold on Mr Buyer…I have never been in the property…never probably even seen it…never done anything to it…SO…I do NOT want and will not accept the responsiblity for ANYTHING that you find wrong after your purchase…Fair enough?”

Just a little CYA from Countrywide…I think.

Re-Read the CA Seller disclosure that goes with the CA Purchase/Sale agreement…and cool off a bit.

Lenders are really taking a hard lick right now and only trying to prevent more legislation and hardship in making loans and doing business.

I heard that there is a move in congress right now to try and stop all foreclosure and change the laws again.

Our business is only going to get tougher if that happens…look at the lease options situations and the subject 2 situations the the state legislatures are “Fixins for Consumer Protection.”

How do you do yours?

Good Luck,
Bill H