Fannie Mae won't negotiate with us
Seller here in the middle of a short sale.
We have the approval to proceed but we cannot get the deficiency waived and we are getting the runaround from every direction.
Our agent says close anyway "they won't come after you" uhhuh, well they do have 6 years and a lot could go on in 6 years.
The house is in Reno, NV and is a Fannie Mae. We applied for HAMP but didn't qualify so we were disqualified for HAFA.
All payments are current - we had to relocate out of state so that I could keep my job, spouse lost his job over a year ago.
I spoke with the bank, Colonial Savings in Ft. Worth TX
They "follow the investor guidelines" and those guidelines say no waivers."They will not contact Fannie on our behalf, they don't do that"
At the advice of folks here we contacted Fannie Mae directly, they told us they won't negotiate with us they will only negotiate with the banks negotiator.
The bank tells us they won't negotiate, they follow guidelines
We are getting the major runaround and I am at a loss. We are willing to settle for something we just can't seem to get to a place where one entity is willing to negotiate with the other on our behalf.
For the record, our agent has pretty much dropped this ball into my lap. She is not thrilled that we won't accept the deal without the waiver but we have consulted our atty and our cpa, we are not willing to take that kind of risk.
Any advice? Suggestions? Resources?
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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Ask them if they will issue a 1099.
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Permalink Reply by Melissa Taylor on
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They have said they would but they have not been clear what type and our CPA says they can issue the 1099 but still come after us on the deficiency
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You may want to find another CPA :) Ask the CPA what the purpose of a 1099 is. What happens when they issue a 1099 and you have to pay taxes on it?
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We will double check - he is of course on vacation this week. I have read a lot about this online and what I am reading is the 1099 does not protect one from the investor selling for collection or pursuing the deficiency
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Permalink Reply by Becky Anderson on
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Jeff---I was told they can not come after you if a 1099 is issued because they are writing the debt off. What's the deal on that?
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Becky that my belief based on what I have researched.. MY CPA says the same thing
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Permalink Reply by Bryant Tutas on
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xx
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Permalink Reply by Chris S on
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There is another method to get a short sale done that the banks are not telling u about and it save u all the heartaches and hoops that the banks put u through.Please go to http://www.facebook.com/AvoidForeclosureAndShortSales U will get all the info u need to make an informed decision.Please let me know what happens
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Permalink Reply by SE Davis on
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Waiving Deficiency balance collection language has nothing to do with a 1099-C.
If they are not waiving it you better believe they will try to sell that debt post closing and either the bank or a third party collection agent will attempt to collect it.
Even still those consequences are MUCH BETTER than allowing a froeclosure to be reported on your credit report where they will sell it post foreclosure REO at a lower price increasing the default collection balance and that is still technically collectable. PLUS you have 5-7 years of adverse credit due to the foreclosure report.
On rare occasions where you have intractable lenders I've had clients close and they successfully fought the collection post closing. The most important factor here is FULL DISCLOSURE to the seller that that scenario may occur.
It is known to be easier negotiating with certain lenders/banks recovery department or third party than it is with their short sale loss mitigation departments.
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Permalink Reply by Jackie Turley on
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My experience has been that if you are current and the short sale lender sees money in the bank, they will not waive the deficiency. It's not in their best interest. As for 1099, they are required to issue a 1099 by federal law, but the taxable amount is waived under certain conditions based on the The Mortgage Forgiveness Debt Relief Act and Debt Cancellation. You should also seek legal counsel.
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Permalink Reply by Joseph Alfe on
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Fannie can and will waive deficiency. Ask your agent or negotiator to go to Fannie directly through the Fannie Mae Help Desk. Have you tried offering them a note or cash contribution to "buy out" the deficiency? That works a high percentage of the time.
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Our agent suggested we contact Fannie Mae which we did through the help desk.
We made an offer to the bank but what we are beginning to understand is that the bank never took the offer to Fannie Mae. Per the Rep at the bank, they will not negotiate with Fannie Mae and per the Rep at Fannie Mae they will only negotiate with the bank.We are so frustrated at this point in time, we are not sure what to do.
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