Short Sale Approvals with Seller isn't Delinquent
Howdy Folks -
Just curious if anyone is seeing short sale approvals when the seller isn't delinquent. We just did one, but the seller was military and being transferred out of country. Most however, the seller has been delinquent. We are seeing more and more people needing to sell due to job transfer and moving...and they are upside down.
So please share who lender was and any special circumstances.
Thanks
Replies to This Discussion
-
Permalink Reply by Jeff Payne on
-
Robert, HAP isn't really a short sale... The Department of Defense actually makes it whole for the borrower. Good program overall, I have done many of these. They are running out of money fast though
-
Permalink Reply by Nate Gerard on
-
As we've read here, things seem to be constantly changing. In my experience there is a specific program from Bank of America that allows both owner occupants AND investors to do a short sale without missing a payment. That program is called a Co-Op Short Sale. My clients (who successfully closed last summer) were one of the first to use it since I saw the BOA VP discuss it in an interview with Alex Charfen from CDPE.
The sellers give all their info up front, in essence proving their hardship and gaining approval for that aspect of the sale. Then BOA does a real appraisal and comes up with a price. You can list it at that price or higher. The price can be lowered every 20 days without an offer and if there's no offer within 120 days BOA does another appraisal.
At any point if you get an offer you enter it into Equator and if it is close to the current approved price you get approval. If it is lower or carries high seller paid closing costs, they may counter, however the entire process after the offer takes a mere 2 weeks. If you come to an agreement with the buyers, closing is approved with a 45-day window and in some cases the sellers even get $3,000 at closing. There is a chance that the sellers may have to contribute to get to closing but in states with anti-deficiency laws this is less likely since BOA knows the seller could stop paying, stay in the home for months, and then walk with no deficiency. Second mortgages do complicate this process a bit but I believe BOA is accepting loans with seconds now as well. Mine didn't have one so I can't comment on the success ratio.
The bottom line is that my sellers (whose hardship was divorce) were both able to go out and buy another home without waiting 12 months. This is just one lender yet it sounds like other lenders are allowing it as well, which makes me optimistic to try it with any lender before a seller makes the decision to stop paying. Of course, as Realtors we can NEVER recommend that a seller stop making payments. They have to make that decision themselves and if possible they should miss as few payments as possible to aid in the recovery of their credit.
-
Permalink Reply by reva harris on
-
I have found that the lenders require the sellers to be at least 30 days late. I had two held up because they were not behind. Both were sellers who sold only due to job transfer. They could afford the payment. I have had one with GMAC that was approved without them being late and they paid $8000 at closing. Happy to do it though to be out of it without a deficiency.
-
Permalink Reply by Woody Edwards on
-
Try the Homeowners Assistance Program (HAP) through the Department of Defense (DoD) for military personnel assistance with the short sale of a home.
-
Permalink Reply by Lora Mahnke on
-
I had a seller that was current on their mortgage and the short sale was approved by the bank Chase, but DENIED by the Mortgage Insurance company. The lender, Chase, would not give the name of the MI company to my seller. I thought the seller could contact the MI company and convince them to accept the short sale. Chase informed my seller that they must be at least 3 months behind on their mortgage. We finally did get approval after the seller stopped making payments and was 3 months behind.
-
Permalink Reply by Jae Evans on
-
I just completed a sale through B of A and the seller was not delinquent. We actually got approval within 45 days. Not requirement for cash or promissory not at closing either....Then on the flip side, I had a sale where the 3rd party negotiation servicer opperating on behalf of the bank required the seller to be in default because then they could approval the sale in house. The seller still had to opt for a 56k promissory note from the mortgage insurance company.
I think a big consideration is how financially healthy the seller is or if their hardship is real or will be real and significant i.e. loss of a job, relocation etc. as opposed to someone with 200k in a CD somewhere...
-
Permalink Reply by Natalie Arndt on
-
It depends who the investor is. For example, I am dealing with BOA on conventional loan, investor is Fannie Mae and BOA does not have requirement of sellers being behind but Fannie Mae will not approve loans unless seller is behind in mortgage payment. Every time you take a short sale check what kind of loan seller has, rules and guildelines of that particular bank and check investors guidelines.
Natalie Arndt, BS, MA, CDPE, CDRS,
-
-
Natalie, I have closed several with BofA and Fannie with current sellers.
-
-
It is amazing that sometimes they go by their own guidlines and sometimes they do not.
Natalie
-
-
Keep in mind that they are simply guidelines and everything is negotiable.
-
-
Great point Jeff.
Natalie A
-
Permalink Reply by Holly B. Long on
-
I have just been told by Chase that because my seller is current they do not qualify for HAFA because they are not at least 30 days late....You say these are simply guidelines and everything is negotiable...how do I make this negotiable? Seller has robbed Peter to pay Paul because he didn't want to completely damage his credit by missing mortgage payments.
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons