Hey Everyone,
This is a first for me. We are working with a short sale and there are two loans on the property. The first is a fannie mae loan being serviced by Seterus and their is a second which is with Greentree.
Greentree is needing to release the lien $26000, but as you know fannie mae will only allow $6000. I spoke to the manager for greentree and he told me that in order to save the deal I need to come up with someone besides the seller (i.e buyer contribution) to make a payment for $xx.xx and that it needs to be on the prelimary hud showing that approved dollar amount so that they can issue a approval letter for the amount that the first approved.
After speaking to my escrow officer she said that she cant do that because once it goes on a HUD she cant remove it because its defrauding the first.
Has anyone had any experiences with any of this and has it worked for you?
Thanks
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Holly,
POC will get kicked since FNMA won't allow other pmts.
$20,000 for appliances? This is the fraud they look for.
Even with the $6000 to the 2nd on the HUD around line 505, you might be able to put a note on line 403 "POC to Greentree $___". There are no numbers in the column, just a note in the left column and then have the buyer bring in a cashier check to the title company written out to Greentree for that amount that gets mailed to Greentree at closing along with the $6000 from the proceeds. This is on the HUD that gets approved by the first and second. I'm not sure if it will work for Fannie Mae, but you could at least try. This way it is disclosed to all lenders.
Also, if it isn't a substantial amount of difference and if there are personal assets on the property that the seller is willing to sell, like a refrigerator, a water softener, a shed, a lawnmower, a dining room table, etc., you might be able to have the buyer buy these items from the seller. The agreement is that they will buy them and contribute the money to the 2nd. What do the rest of you think? I would think that this would be fine.
I would never pay a bank before recording thinking that they will give the money back if it doesn't close. I can't believe that they would actually send the money back in a million years.
You may have a couple of options still.
Send an email and registered letter to Greentree. let them know that thier suggestion by definition violates federal guidleines and that they know this. Tell them that you will not be involved in violating laws or requirements in a sale.
Then suggest that there are three options:
1. Close per the requirements of the first and HUD delivered to the first.
2. to have the Buyer purchase the note at the closing table for some amount, then you could proceed with the closing of the first. The buyer would then release the second for the amt agreed to in the HUD.
3. To create resigning of a new unsecured note by the seller in some agreed amount at closing. (then anyone can pay that amt for the seller if they wish to after the closing, and even by agreed secondary contract. Once the closing takes place the unsecured note would stand alone and not be part of real estate transaction in the HUD.....however with the proper documentation it can be agreed to as terms that do not have to be disclosed to teh lenders and used as part of purchase agreement price as far as the purchaser is concerned.
I believe that #2 and #3 are agreements outside of the contract and could void the short sale approval.
I am having the same issue. Yuck!
Freddie, FNMA Guidelines state that when they are offering the subordinates $$$ no other party(s) can offer them any additional $$$.