Nationstar or Champion Mortgage Tried to defraud us while purchasing their REO Texas

My husband and I found a house for sale that was exactly what we have been looking for. We drove past the house then had a realtor show us the inside. The house was a foreclosure and had been on the market for over 6 months already. We applied for our mortgage before putting in an offer, to make sure we could even buy it. As soon as we got the word, we submitted our offer. The bank countered, wanting a higher purchase price and a higher earnest money deposit.

Our realtor was stumped by why they would want a higher EMD, since it is our money that goes to our closing costs and the amount we offered was suitable and fair. We countered, meeting them in the middle on the purchase price but keeping the EMD the same. We set the time to respond and submitted again. Like the previous offer, our realtor had to call the other agent, well after the offer expired to find out what was going on. The response this time was that there was another offer and we needed to submit our best and final offer.

This seemed very fishy to us but we went ahead and submitted our offer at what they countered, including the higher EMD. That was a Thursday afternoon. We asked to have an answer by 10 Friday and ofcourse, nothing. Our realtor reached out all weekend and never heard back from the other agent. Suddenly she received and email Monday (which was a Holiday) stating that they accepted our offer. The email included two attachments for us to sign. One was a standard form. The other was the sellers addendum, which is common in foreclosures to protect the bank. Our agent had ask to see this addendum previously and it was not provided. 

The first red flag was that the email with the attachment stated that they wanted to give us 14 days for inspections and close in 28 days. The addendum stated that we only had 7 days for inspections. They house currently has no utilities and we have to have them turned on for inspections. Only giving us 7 days is almost impossible. They did say that they would change that to the 14 days. 

The second red flag was the following paragraph: 

• Within fifteen (15) days from the Effective Date of the Contract the Earnest Money shall become nonrefundable. In the event the Contract provides for the release of the Earnest Money to Seller, execution of this Addendum by the Buyer will serve as written release and the only release necessary, for the Escrow Company, or closing agent to immediately release the Earnest Money as such to the seller.

The only reason that EMD are not returned are if you do not purchase the house without good cause. There is no way I could have gotten that house appraised in 15 days to make sure my financing would have gone through, that is if I got all the inspections done and they all passed. That paragraph made me feel like that was the reason why they wanted a higher EMD, they planned to keep it. We asked for that to be removed and they refused. They did agree they we could add an addendum that stated it would be refunded if financing fell through. Only problem with that is, Their addendum stated that it rules. If there are any conflicts between the contract and addendum or and other addendum, theirs ruled, so ours wouldn't matter. 

The third red flag was this paragraph:

• Seller shall have the absolute and unilateral right to terminate the Contract at any time prior to and including the date of closing, without cause, upon written notification delivered to the Buyer. In the event Seller exercises its right to terminate the Contract, Buyer’s sole remedy shall be to receive a return of the Buyer’s Earnest Money deposit, and the parties shall thereafter be relieved of all obligations under the terms of this Contract and all addenda.

The right to terminate was the final straw for us. Inspections are not cheap and this house has a septic and a well, which require separate inspections. I could have spent anywhere from $1500 to $2000 for inspections, then god knows what for any needed repairs, only to have them cancel the whole deal the day before closing. And they only thing they would owe me would be MY $1500 EMD. I would lose the rest of my money. As much as I loved this house and had already mentally placed my furniture and picked out what floor and new counters I wanted, I could not risk losing money like that. 

With tax season approaching, I worry about someone who may be so excited to buy a house that they don't catch these items. I would hate to see someone get taken advantage of.