FNMA will only OK shortsale on primary home?
BofA is now telling me that because my client has another home as their primary residence (which they want to keep), they cannot do a short sale on another property (formerly their primary residence 5+ years ago). It must be either a traditional resale without short sale, or a Deed In Lieu.
Your comments are appreciated
Chuck
Your comments are appreciated
Chuck
Replies to This Discussion
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Permalink Reply by Denim Wallace on
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Interesting... I've noticed they've really been cracking down on those lately. We are dealing with one that they want a prom. note for the deficiency balance and this guy has had a significant decrease in income.
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Permalink Reply by Bryant Tutas on
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Not true. I close FNMA short sales all the time on investment property. Speak to someone else.
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Permalink Reply by Michael Schneider on
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Do you mean, cannot do a Fannie HAFA short sale? I think that would be the case.
You can still apply for a short sale.
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Permalink Reply by Chuck Harmon on
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"...Borrowers that meet the eligibility criteria for HAMP but who are not offered a Trial Period Plan, do not successfully complete a Trial Period Plan, or default on a HAMP modification should first be considered for other loan modification or retention programs offered by the servicer prior to being evaluated for HAFA.
In accordance with the provisions of Supplemental Directive 09-01, a loan meets the basic eligibility criteria if all of the following conditions are met: The property is the borrower’s principal residence..."
The above verbiage was taken from the HAFA Guidelines. As I posted, this is not the owner's primary home. Do you still think it is permitted to pursue HAFA shortsale? I like the HAFA provision that rules out deficiency judgements and would to see my client get this protection. But again, I didn't think HAFA was applicable.
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Chuck,
I haven't run a loan through the Fannie/HAFA process, yet. I believe that it's being implemented as a back-end program, meaning that you apply for a short sale, then on the back-end it is reviewed for HAFA or "traditional".
The exception for owner-occupied is relo for employment. Absent that, I would say that your client is probably not HAFA-eligible. But, I think the right approach is to submit the the best, most compelling, file to BofA, the Fannie Servicer, and then follow-up to manage the file and negotiate the best terms for your client.
Fannie's policy has been to retain rights to pursue the deficiency, non-negotiable. But, I don't think this needs to be a show-stopper to achieving a good outcome for your client.
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I had a BoA short sale earlier this year on an investment property. He owned a few other properties. BoA approved the short sale.
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