Forum

I am trying to assist a family member with a disability who has been waiting on a Flagstar FHA short sale condo since October 2012.  The seller does have the ATP from FHA, however I do not know when it was first received.  I know an updated one was needed fairly recently, so I'm assuming the original expired, even though there has been an offer on the table for nearly a year.  

At the start of last week the buyer was told the short sale specialist at the listing agency had gone over all the HUD numbers with the Team Lead at Flagstar and everything looked good.  They just needed 5 days to get the final approval signatures so the closing could be scheduled.  On the 5th day, the specialist came back and said the Team Lead at Flagstar said the net to HUD was too low and another $3,500 had to come from the buyer.  

From what I've been able to piece together:  5 months after the initial offer, Flagstar countered to the full value of the appraisal.  The buyer was told he had to sign the addendum within 24 hours to stop the foreclosure hearing that was scheduled at the end of March.  Then in April he learned there are HOA dues and an assessment that needs to be paid, and the buyer agreed to pay that too.  After many delays, and the short sale specialist escalating the file within Flagstar, a new payoff statement was requested from the HOA, where the dues were higher than they were in April, naturally, but the buyer agreed to the new amount and he was told to anticipate a closing...tomorrow actually.  Now he's being told the net to HUD is too low and he has to come up with even more money.

He has requested the HUD statement to see how numbers that all looked good a week ago Monday were suddenly $3500 too low on Friday.  I'm also having trouble understanding how a counter-offer at full appraisal value, an agreement to pay HOA dues/assessment, and the closing cost for a cash purchase is suddenly not able to net 84% of the appraisal cost to HUD.  It sounds like Flagstar might be forcing this sale to foreclosure, nearly an entire year after having an offer that was initially 95% of the full appraisal amount.  The amount they currently want from the buyer that includes the HOA dues and the mysterious $3500 to bring it to the minimum net, would put the total cost to the buyer at 20% over the appraisal.  The short sale specialist doesn't seem to have any idea what to do here except ask the buyer if he's going to pay it or not.  

Anyone got any advice?