Guys, the FHA, VA ammendatory clause- a lot of confusion when it comes to paying over appraised value.

Lots of people are saying that that gives the buyer an out and they don't have to pay over appraised value they have to buy the home for whatever it appraises for or they can get out of the contract. That is a federal rule. That's a federal document. Contracts are a state document and a binding agreement. That's going to take precedence first. Typically, that's how it should work.

So, what we do is, that ammendatory clause, we don't get that signed up front. What I do on those transactions to give a listing agent, a little bit more ability to agree to take on a VA or FHA offer that's going to pay or appraised value not thinking that's an out, is I allow the seller and the agent to sign that at closing. Along with our buyer, instead of signing it up front. Why do we do that? Because the closing documents are going to be sent with the correct purchase price showing being paid over appraised value, they'll have a settlement statement they'll give to the seller, then the seller signs that amendatory clause, then the agent signs it, then the buyer signs it. Everybody understands that the numbers are correct. We're pretty much at that point of no return because we're down at closing and things aren't going to get flipped flopped and changed.Then you can issue cure notices as a listing agent, or whatever you would need to do if the lender starts jerking your chain.

That's what we do and we talk about that in the beginning when we're making offers with the listing agent let them know, because there's too much confusion going around on this. Thanks again.

Jason Smith - The Mortgage Smith
VP/Branch Manager Producing | Residential Mortgage Loan Originator | NOVA® Home Loans
NMLS# 210839

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BK 0902429 / NOVA NMLS 3087 / Equal Housing Opportunity / 8800 East Raintree Drive, Suite 110 Scottsdale, AZ 85260. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act #4131230. Also licensed by the CA-DBO under the CFL#6036566. Loans made or arranged pursuant to a California Financing Law License.

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