Providing you with the knowledge and tools needed to succeed with Short Sales
I have been negotiating with Ocuwen to get a short sale approved for a client. After the initial runaround of having to send the same paperwork in over and over only to be told that FHA will not allow the short sale and that my client will be forced into a loan modification program that she is unable to pay, I remain diligent to help these people.
My concern is that although FHA specifically states that they have the right to do this hold the sellers to a loan modification program, the banks are not all treating the guidelines the same. Some are following, others aren't. How is this determination made and is this not discrimination? Who gets the short sale pass and who is held to the guideline?
Although we are continually told that there will be a universal process implemented or has already been, the rules change depending on who is doing the negotiating from one minute to the next.
Has anyone had a successful escalation with this issue? Please advise.
Linda C Babbitt
Keller Williams Realty
50 Sewall Street
Portland, Maine 04102
FHA guidelines are pretty similar from lender to lender. In order for a short sale to occur your client needs to be dis-qualified for a modification. Typically the FHA loan modification is based on a front end DTI of 31% and a back end DTI of 55%. It is fairly standardized. Ocwen is only covering their butt, in order to meet the insurance requirements.
Per the FHA Short Sale guidelines, the borrower must first be denied or approved for a modifcation prior to submitting for a short sale. FHA does waive the modification only if there is a job transfer to another state or death of a primary borrower. This is on a case by case basis. If the borrower has been denied or approved for a modifcation prior then submit the modification denial or approval to OCWEN. I am a DE Underwriter and Realtor and have cloed quite a few FHA short sales with various lenders.
Santa Clarita, CA