Depending on the estimate, FHA loans currently make up approximately 25% of total mortgage originations. Recent experience has led me to realize that although most real estate professionals know what they’re doing, there are still many who need a little coaching on the main disclosure; the FHA Amendatory Clause/ Real Estate Certification.
Here are three essential things professionals and consumers need to know:
If John & Jody Homebuyer write an offer with their real estate agent Shelly Sellalot to purchase a home on September 1st, then John & Jody must sign and date the Amendatory Clause on September 1st.
If the sellers, Jay & Judy Homeseller, along with their listing agent Bob Bigbucks, respond to the offer on September 2nd, then Jay & Judy must sign the Amendatory Clause on September 2nd irregardless of their response (unless they simply reject the offer all together).
With regard to the Real Estate Certification John, Jody, Shelly, Jay, Judy, and Bob all need to sign this section but the date is not critical.
What are the parties signing? In so many words the Amendatory Clause gives the homebuyer(s) permission to back out of the transaction and receive their earnest money back if the property does not appraise for the amount they are buying the house for.
The Real Estate Certification states that the entirety of the sales agreement is disclosed in the earnest money agreement and accompanying addendums which are ALL provided to the lender.
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My blog is a tool for me to provide updates on what is happening in the financial markets that will impact mortgage rates, update professional partners on what is happening in the mortgage industry, and write about general financially related topics.