Oh boy ... how do some folks get themselves into such a mess?  I need everybody's help to figure out if this short sale has potential to materialize.  Here's what's going on with some prospective short sale sellers I'm recently come into contact with.  Their hardship is legitimate in that the husband was out of work for 5 months due to serious health problems (has been working ever since he got better).  After going through savings and attempting to modify, they figured they would kill 2 birds with one stone and rented an apartment closer to work while simultaneously renting out their home (the one they wish to short sale).  The Tenant turned out to be a deadbeat and only paid about 4 months of rent, stayed for about 7-8 months and then broke the lease and moved out.  They paid a chunk of money they had from rents received back in March (2013) to come current but have since not paid.  Their lender (Bogman, Inc) is telling me that they don't think the short sale will be allowed since they are not living in the property.

Has anyone else encountered something like this?  Do you think they have a case if they move back into the house?  Exactly what do FHA guidelines say about short sales and occupancy?  Any help will be most appreciated!

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Read Mortgagee Letter 2008-43.

I was able to close an FHA short sale that the seller had vacated because they thought since they couldn't make the payment they shouldn't be allowed to stay in.  The house was vacant for around a year because they tried to do a modification which finally got denied because the seller was out of work although the wife was employed.  Long story, but we did get it closed.


       How long have they been out of the property? It may be possible for a variance to be requested from HUD to allow the short sale to proceed in the pre foreclosure sale program even though the property is vacant. Also, the borrower moving back into the property may be an option as well. I'd give this one a chance if I had the opportunity.

Hope this helps and if you have any questions feel free to reach out to me as my door is always open.

[email protected]



Hi Mike, I had an FHA seller told to move out by his bankruptcy attorney.  3 years later he called me to do a short sale.  BofA said no way the home is vacated.  HUD told me to list the home and get an offer and that way BofA would be forced to work the file and get the vacancy variance.  Took 5 months, but it all worked out after epic battles.  Good luck!

Sounds to me like they moved for employment reasons and the property was not rented out for an 18 month+ period? If so , I've gotten this exact scenariothrough without a variance.

In the past we could get a variance but recently banks are denying them without even trying for a variance. Short sales are changing for the worse.

I've had to fight for 90% of the variances I've gotten.  Never take NO for a NO.  Fight the fight.



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