My husband is active duty, we used the PCS orders hardship that came out in August 2012. Today, FM denied our short sale request based on the orders- no explanation, but the bank had warned us that our orders were 'too old' and may be denied. The orders were from July 2010, the regulation came out in August 2012, and we've been trying to sell the house since June 2010. Our first offer EVER came this spring, May 2013.
I'm waiting for a more lengthy explanation from FM, and have a call in to them. My bank does not know any more. FM sent their response back to the bank with a deed in lieu of foreclosure application for us since all of our payments have been on time.
We're not doing a Deed in lieu of, and I'm confused by the denial. I've heard of other people doing short sales while maintaining payments so that they don't completely ruin their credit.
Can anyone shed light on the situation or offer helpful hints? My husband is deployed, and I'm handling this on my own. I am willing to contribute, but nothing was asked of us to contribute, just denied.
We requested the PCS orders hardship, as well as financial hardship as our tenants have moved and the house is vacant. Both were denied. I am not aware of what a standard stream lined hardship is, can you explain it? Neither of us are in the home, when my husband received orders, they were out of state, and we moved as a family. We had to rent it out to avoid foreclosure. The house is now vacant. We are more than 50 miles from the residence. We do have a new mortgage for our primary residence.
My understanding of the regulation is that if you have PCS orders, that is the hardship. That was confirmed by the FHFA when I spoke to them on the phone, in June 2012, before the regulation was even released, and also by Freddie Mac when I called them about it when submitting our short sale package. While the explanation that it can't be used retroactively might be appropriate, that is not mentioned at all in the regulation. We are part of a community that has been struggling to maintain our obligation to our investor the longest. Active duty that bought in or before 2006 are typically able to utilize HAP, while we bought in 2007, and cannot. Those who bought shortly after us have been able to use HARP, HAMP or a loan modification, which we either do not qualify for (per our bank), or it adds $8000+ to the principal that we are already underwater on. The goal was always to sell the home, which is why it was on the market every spring since getting orders.
I was told today by FM that our PCS orders were denied because we rented the house out and were able to maintain payments (regardless of losing $500/month), so they don't consider our orders a hardship. Doesn't make sense to me. I was also told that despite two mortgages, student loans, one income and a vacant house with no tenants, that we still do not qualify for a financial hardship. I also do not understand this.
Let me know what other information might be pertinent to help explain the situation, if the above isn't enough. I'd really like to understand the process better, and if there is a way to clarify information for THEM, and the possibility of reconsideration, I'll do everything that I can. I've clearly never been in this situation before, and do not know the ins and outs. Thanks for the guidance.
We have now been told by Freddie that they will accept a contribution of the balance of the loan. Their valuation of the home is about $20k over what our appraiser put it at, and what anything in the area is selling for. I think their valuation is completely wrong for starters, and secondly, don't understand how it is then a short sale if we pay off the entire loan. Can anyone help answer? My realtor is requesting that they have a state approved appraiser do an appraisal, and wants to counter at $10k. How often do investors change their valuation of the home? What is the process we would need to go by? Thanks!
Thank you for explaining this Rob. I recently did an Equator financial form for Chase (Freddie) and to debt/income came to around 7 or 8 which baffled me. Borrower's husband left her, and she pays all the bills. Income is about $2700/month (net) maybe $3500 gross and mortgage plus hoa is about $1100/month, so how do they get 7 or 8? She has about 9000 in 401k and almost nothing in checking/savings. I'm guessing the number at the bottom is supposed to be front end? I recall in the past I used to see 35%+. I wrote the rep if something was wrong with the form but never got an answer. Is the 7% or 8% (which was not identified supposed to be the front end ratio or something else). I noticed when I plugged numbers in to test what it would do (such as increasing 401K) the number would drop further....so I don't know what it is referencing.
Darlene, Freddie Mac has gotten very difficult to work. My experience the past year is they regularly want 10-20% more than appraised value. They like to push the deed-in-lieu also. I used to have no problems getting them to come down with submission of an appraisal, but this has not been the case the past 6 months. So, I wouldn't bet on that. An appraisal will cost you a few hundred. It could help. It may not. If there is an offer under contract, the buyer should definately counter.
Thank you both for your advice. Each discussion with them leads me to believe that there may be a chance, then they call back with another denial. Kind of at the end of my rope right now. I did find this: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1303.pdf , which, on page 5, indicates that the servicer is no longer able to only use a BPO for a property value when the borrower is current on payments; am I correct in understanding that since we are current on payments, the servicer is then required to get an actual appraisal? That was my understanding of this document, would love your input.
Also, what is the procedure for disputing the valuation? My realtor doesn't seem to know.
Who is the entity that makes the final decision? Navy Federal says that Freddie has the ultimate decision, Freddie says that Navy Federal will have to decide. You see where I may not trust either of them any longer.
Finally, it was also my understanding that my husband's retirement cannot be considered an asset. It is in his TSP (Thrift Savings Plan). If we're not counting his retirement, we do not have the cash to even cover the balance of the loan that they state will be the only contribution they will accept.
I've contacted the FHFA as well, and they've been less than helpful. Who regulates any of this? Why, as an active duty family that had orders to move away from the home, and are now paying double mortgages, and have lost $50k over this house, can we not just complete a short sale with an adjusted contribution? It happens all the time, I feel like I'm missing something. Anyone?
Thanks so much. I'm wondering if my agent is doing all that he can, and feel as though I'm actually doing much more legwork than he is. At this point, I don't want to lose our buyers, and just want it over. My husband, too, believes that the agent should be doing more, instead of me calling everyone all day long and ending up in tears each time. It's incredibly frustrating.
It does appear as though we do rate a copy of the appraisal or BPO or whatever the bank had done, as it pertains to our property, so it should be disclosed. Is this correct?
If the value of the home is lowered to the correct amount, should that change the amount of contribution that Freddie asks for? That was my understanding all along, which is why we are now starting the dispute of the valuation.