Received DENIAL letter from BOA today! Now what?
Just found out today via REGULAR mail in UNMARKED envelope. In fact I almost threw the envelope out! It had a return address from Wisconsin. Very upset. We really thought we qualified! My husband just spoke to someone with the number they told us to call...She said it is now placed under the traditional short sale file..He asked "when approximately" we will find out about the offer we have on the table .The woman said there are "no notes stating that Fannie Mae will be countering"...and said this might be a good sign in so many words. My husband asked if it could be expedited any quicker since we were out of atty. review on 9/10/10. I just hope the buyer doesn't walk.
In all traditional short sales does the bank automatically make you pay the difference back? It would be approx. 60k if so.
The woman he spoke with gave no time frame on when we would hear back.. Frustrated is all I could say. I cannot believe the HAFA program! What a scam!
Replies to This Discussion
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Permalink Reply by Marty Hackworth on
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Hello, I'm so sorry to hear about your letter. Can you provide a little more information? What exactly does the letter say? What's the reason for denial? What state are you in? Sounds like you have an offer, is your property listed with an agent? If so, is the agent negotiating the short sale on your behalf or are you negotiating the short sale yourselves?
Do you have one loan or more than one? Is it the same loan you purchased the house with, or have you refinanced?
The quick answer is that all traditional short sales do not make you pay the difference back, depending, of course, on what state you are in and the details of your loan. If you have refinanced and are in a recourse loan in a deficiency state, you'll need to pay very close attention to the langues in your approval letter.
Ultimately you are looking for a full release of lien and removed deficiency rights. FYI, 60k short is very small in comparison other short sales approved on a daily basis. Hope that helps to start, with more information more answers can be provided.
Thanks! Marty
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Permalink Reply by Smitty on
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I am NOT a fan of HAFA. I think HAFA works for a minimal amount of homeowners which is why I opt for a traditional short sale.
If you are in a recourse state (check your state laws) the lender can come after you (pursue you in court) for the deficient amount. I have a hard time believing they would pursue a $60,000 balance, but I don't know your lender, what your home is worth, if there is a second note etc. Most second notes are recourse.
If the lender forgives the difference you will want to make sure you are insolvent. If you are insolvent then you can walk away from the short sale and owe NO ONE. If your insolvent you'll fall under the mortgage debt forgiveness act and will not have tax ramifications.
If the lender does NOT forgive the difference and 'reserves the right to pursue' you in court, then they can come after you for the difference. IT DOES NOT MEAN THEY WILL COME AFTER YOU FOR THE DIFFERENCE. A lot of it is boilerplate in the approval letters. Check you state laws and see how long they have to pursue you. They may have alloted time to bring you to court and if they don't, it will likely be treated as regular debt and sold off to a 3rd party company for collections.
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Permalink Reply by Shannon Jones on
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Do you have a Realtor? Have you spoken with your Realtor? An attorney? I would definitely suggest speaking with one of them and having them contact the lender to see if they can get any more feedback beyond what you've gotten.
Just because you don't qualify for HAFA doesn't mean you won't qualify for a traditional short sale. I have clients who we've handled short sales for who didn't qualify for HAFA but did qualify for "regular short sales."
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Permalink Reply by S Smith on
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Smitty said:
Thanks to everyone for replying to me.I am NOT a fan of HAFA. I think HAFA works for a minimal amount of homeowners which is why I opt for a traditional short sale.
If you are in a recourse state (check your state laws) the lender can come after you (pursue you in court) for the deficient amount. I have a hard time believing they would pursue a $60,000 balance, but I don't know your lender, what your home is worth, if there is a second note etc. Most second notes are recourse.
If the lender forgives the difference you will want to make sure you are insolvent. If you are insolvent then you can walk away from the short sale and owe NO ONE. If your insolvent you'll fall under the mortgage debt forgiveness act and will not have tax ramifications.
If the lender does NOT forgive the difference and 'reserves the right to pursue' you in court, then they can come after you for the difference. IT DOES NOT MEAN THEY WILL COME AFTER YOU FOR THE DIFFERENCE. A lot of it is boilerplate in the approval letters. Check you state laws and see how long they have to pursue you. They may have alloted time to bring you to court and if they don't, it will likely be treated as regular debt and sold off to a 3rd party company for collections.
We do have an offer of 230k. Owe 290k so diff. would be 60k .That's of course IF they accept it. Was told it was converted to traditional short sale now in computer per BOA rep.
The letter said we are ineligible for HaFA. SO when they wanted all the credit cards,etc..it didn't matter to factor that in? only based on mortgage? ... that the gross is equal to or less than 31 percent...etc.
In NJ also...
Lender is BOA/Fannie Mae is the investor. I just hope the buyer doesn't walk. This was out of atty review in mid Sept.
Can this be expedited due to waiting for the HAFA and now wasted time on that-I mean how long out when they make a decision to accept offer or counter it??? We do have a realtor and atty...Atty. doing it all, not realtor...
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S Smith said:
OH! also 2 loans one for 260 and one for 30k all through BOA.
Smitty said:
Thanks to everyone for replying to me.I am NOT a fan of HAFA. I think HAFA works for a minimal amount of homeowners which is why I opt for a traditional short sale.
If you are in a recourse state (check your state laws) the lender can come after you (pursue you in court) for the deficient amount. I have a hard time believing they would pursue a $60,000 balance, but I don't know your lender, what your home is worth, if there is a second note etc. Most second notes are recourse.
If the lender forgives the difference you will want to make sure you are insolvent. If you are insolvent then you can walk away from the short sale and owe NO ONE. If your insolvent you'll fall under the mortgage debt forgiveness act and will not have tax ramifications.
If the lender does NOT forgive the difference and 'reserves the right to pursue' you in court, then they can come after you for the difference. IT DOES NOT MEAN THEY WILL COME AFTER YOU FOR THE DIFFERENCE. A lot of it is boilerplate in the approval letters. Check you state laws and see how long they have to pursue you. They may have alloted time to bring you to court and if they don't, it will likely be treated as regular debt and sold off to a 3rd party company for collections.
We do have an offer of 230k. Owe 290k so diff. would be 60k .That's of course IF they accept it. Was told it was converted to traditional short sale now in computer per BOA rep.
The letter said we are ineligible for HaFA. SO when they wanted all the credit cards,etc..it didn't matter to factor that in? only based on mortgage? ... that the gross is equal to or less than 31 percent...etc.
In NJ also...
Lender is BOA/Fannie Mae is the investor. I just hope the buyer doesn't walk. This was out of atty review in mid Sept.
Can this be expedited due to waiting for the HAFA and now wasted time on that-I mean how long out when they make a decision to accept offer or counter it??? We do have a realtor and atty...Atty. doing it all, not realtor...
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