Selling house less than mortgage balance. I have funds in restricted escrow (loss draft) sufficient to cover the difference, but mortgage company won’t let it be part of the payoff quote - result is $30k I need in cash to close. Advice needed

Hey all, sorry for the novel of a title.

There’s a long back story here, but it boils down to this:

1. Sale price $255k
   
2. Mortgage balance $273k
   
3. We have a loss draft balance of $134k (house fire insurance funds, will be paid back to us).

Regarding #3, I already gave the mortgage company my letter of intent to apply that to the balance of the mortgage. Additionally, the payoff quote already states they will pull from this in the event the sale price isn’t sufficient to cover the mortgage.

However, they can’t put that on the payoff quote itself. Meaning, unless my title company says differently, I’ll need to go to closing with around $30k (I don’t have the draft closing document yet, that’s my guess).

My question: first, is it possible to negotiate with my title company on letting me closing without bringing that money (since it’ll be coming back regardless)? My guess it’s most likely not.

Second, what are my options if I don’t have the funds to bring cash to closing? I cant imagine it makes sense for this to hold up the sale of a home when there’s obviously the money to repay the difference thats already with the mortgage company, but each time I called to explain the situation, they were of no help.

I’ve thought of a bridge loan from a bank, but it’s annoy me to pay interest on that amount. Also I’m not sure how quick that can happen, because we’re supposed to close this week.

Anyway, sorry if I left out detail. Happy to provide anything else if needed.

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source https://www.reddit.com/r/RealEstate/comments/1w3xoez/selling_house_less_than_mortgage_balance_i_have/