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Permalink Reply by Drew Ludlow on February 27, 2012 at 7:14am

Very interesting.... in fact, I was just ready to make a separate post on this EXACT topic, but thought I would include it here.

I just got BoA approval on my HAFA short sale with BoA as the first and an HoA second lien.  The HoA (through their attorney) agreed to take $2500 as full settlement.

Now... I read through the MHA Supplemental Directive and thoroughly read the portion about the Seller using their relocation incentive.  The MHA Directive will NOT allow that incentive to be used for a non-mortgage lien.

But, I spoke with my negotiator today just to ask anyway.  I specifically stated that this is a lien.  She said it was OK.  I could reduce the HAFA relo incentive by $2500, place the remainder in the 500s section of the HUD and then place the HOA lien payoff in the 1300 section.

I even got it in writing in an email from the negotiator that this was the procedure she wanted to payoff the HOA "dues/lien".

Now... my guess is that by putting it in the 1300s section, it appears as just 'dues' and not a lien.  Maybe that was her reasoning, because the Directive DOES allow the incentive to be used for other things.

This is not a FNMA loan, by the way.

Anyway, it might be worth it to ask your negotiator if your seller can use the relo money for this purpose.

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Permalink Reply by William F Griffin Jr on February 27, 2012 at 2:15pm

Get a new buyer that will buy subject to lien.  We just sold 3 short sales in the last month where the buyer took it subject to the lien.

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