HAFA to 2nd lien - looking for guideline - thought it was 10% up to $8500. BofA 2nd is insisting on full $8500 when payoff is approx $30K and we have $3K approved. Closing supposed to be today. Service release on Friday. Please help!!!  Need a link to actual guideline!!!

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Tracie, you are correct, the senior lenders have been asked to offer 10% or $8500 to a junior lien holder. However, as we have all see over the last 30 years, Banks make up their own rules once the public spotlight is off them and on the fiasco called ObamaCare. Sorry, I will get off my soapbox now.

So a junior lien holder doesn't have to accept the $8500 and in fact most are demanding more now because they know that the loan officer, agents or buyers will contribute to the shortage. This is how we got our last 3 deals closed with Ocwen, BofA, Chase and WF. In fact Ocwen servicing for BofA second asked for 29% from the senior lender, which was also BofA. We negotiated with everyone involved and got the deal done.

As for the servicing release, that is a new trick that BofA is using to get the loan off of their books. We have had this problem twice in the last 6 months, both by BofA and after we already had both lender approvals in hand and closing within 30 days. Our very angry email to the Presidents office was returned immediately with an apology saying it was out of their hands.

So I am sorry for the bad news, but I recommend calling everyone involved and getting some contributions from everyone who can legally contribute. 

Good luck,

Erik

Ron, I am only referencing what the last 3 negotiators have told us, which is that they will pay $8500 or 10% of UPB, whichever is less. Since they are saying this, we assume it is a guideline? Kevin is the fact checker, we could ping him for guideline updates.  

Borrower cannot contribute on a HAFA short sale to the second position lien holder.  If you continue on the HAFA path with this sale the borrower will be prohibited from contributing.  If you opt out of HAFA the borrower can likely contribute to the second lien.

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