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?
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I am so sorry to read and re-read you explaining how the bank negotiator and investor will not work with you. With my own short sale dealings I have gone above my bank negotiator's head (escalate to their managers) in order to reach someone who is capable of reading more than what's on their monitor and actually looking at resolving the issue outside of the box. Call your bank back but to the main short sale number (not directly to your negotiator) ask the phone representative to provide you the negotiator's supervisor's contact information (or transfer you directly). Start pushing uphill either that supervisor or if necessary their superior (this can take several days/weeks to accomplish) until someone can communicate directly with FM while you are either on the line with them (3 way) or while you hold. I wish you tons of luck.
Leslie - thank you so much for addressing our exact issue and giving me some ideas.
We will go what you suggest and keep pushing.
In my experience as a short sale negotiator, many times Fannie Mae won't provide a deficiency waiver until the seller offers to/agrees to give them $1000 cash at close of escrow (a very small price to pay for piece of mind). Make sure your negotiator makes it clear to Fannie Mae that the property was your PRIMARY residence until you had to move for a job relocation. They won't do a deficiency waiver on an investment property. Good luck, and let us know how it turns out!
We were willing to make a cash offer, we expressed this to our bank several times to which we got no response.
Like I said our bank never took the offer to Fannie and Fannie is refusing to talk to us directly. This is where the difficulty lies
Any suggestions on how to get Fannie to talk to us or force our bank to actually talk to them?
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.
www.ssprocessors.com
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.
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.
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.
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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