Friday, July 24, 2009

Are REO Deals Breaking Contract Law?

See my original post about the great. Big. Fun! you can have while shopping for REO foreclosure properties and how the banks can change your contract closing date whenever they feel like it.

Today I found a a new wrinkle while I was reviewing the FAQs on an REO listing. This is a true gem:

REO Asset Manager will not sign the HOA Addendum or As Is Addendum. You can submit but Asset Manager will not sign. Also, no changes are to be made to the REO company's Addendum. Any cross outs, additions or changes will make the bank's Addendum void.

So, the bank can refuse to sign parts of the buyers' offer, and can change the buyer's purchase offer documents at will . . .  but the buyers can't change the bank's documents at all. How nice. It must feel so special to be an REO Asset Manager! Kind of like being the God of your own little kingdom.

I begin to doubt the wisdom of buying an REO property. I'm not sure the price buyers can generally get on foreclosures is far enough below market values to justify the (il)legal shenanigans the banks pull.