Mar 11, 2010

Tip 12-2010: Correct Names on Contract

It’s always advisable for the Purchase Contract to correctly identify the Purchaser’s name so that it matches exactly the name on the loan application (Spelling, Middle Initials, Suffix, etc). The important point is that the names on the loan package correctly match the names on the deed, insurance policy and other documents.

Now there are two new reasons that the names on the contract need to be correct. First, some REO Sellers will not change their deed from the names in the contract and will not allow the contract to be changed. Second, some lenders and their underwriters may not let you change the names at all from the loan application (ex. middle initials). Accordingly, if the contract says “John Smith” and the loan application says “Jonathan E. Smith”, and if neither lender nor REO Seller will allow any changes, then there will be a problem.

To avoid any of these problems, make sure that the names on the contract exactly match the names the purchaser wants on the deed. Also be sure to verify that these names also match the names on the loan application.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia

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