Bank of America / Fannie Mae Declined Even With Death of Co-Borrower
I just had a Fannie Mae short sale DECLINED even with DEATH OF A CO-BORROWER by Bank of America with this message :
Good morning, your offer has been declined for following reason. Declined. Hardship does not meet FNMA’s Imminent Default guidelines. Imminent default hardships must be as a result of a current situation such as death of the borrower or co-borrower, long term disability of a borrower or co-borrower, divorce or legal separation of a borrower or co-borrower, distant employment transfer/relocation including a permanent change of station (PCS) order greater than 50 miles one-way.
In fact, we uploaded the DEATH CERTIFICATE a few weeks ago and it is stated on the hardship letter. This seller is current, but that's ok per new Fannie Mae guidelines.
QUOTE from Fannie Mae effective Nov 1 :
Under the new guidelines, servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer.
I am hoping there was just a serious error reviewing this file. I am awaiting the response from my three emails to the negotiator and one phone call.
Replies to This Discussion
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Permalink Reply by Wendy Rulnick on
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By the way, REDC is the outsourced vendor working this file.
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Permalink Reply by Kevin - Greenville, SC on
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I would go ahead and resubmit. I have held off on a few of my files until today.
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Kevin - I might have to have this seller OPT out of the REDC Coop program. Then he has to decide if he wants to default. He's drained his savings. The negotiator "hinting" the death in 2008 was too long ago, but not giving a real reason. Now we risk losing the buyer for time's sake. How tedious and blatantly outside of Fannie Mae guidelines that were even quoted as reason for decline... !
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Kevin - Bank of America's response actually quoted the new Fannie Mae guidelines, stating DEATH OF A CO-BORROWER was one of the approval circumstances. They must have ignore the TWO uploaded DEATH CERTIFICATES and the hardship letter. I am hoping the guy mixed up his files. Everyone has a bad day, right?
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Permalink Reply by Micki O'Toole on
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Hi Wendy. I don't normally post/reply but I saw your post and just thought I'd throw out this little tidbit in case it means anything. I read the blog post by Mark Karten on Active Rain the other day regarding how Fannie Mae is declining short sales. I checked with our negotiator and she confirmed that the files we are having the most difficulty with right now are Fannie Mae owned. Values have been the big issue for us where they come back sometimes up to $35000 over the BPO and then close the file once we value dispute. And while I know that's not your situation, I couldn't help but think it may still be part of this whole thing? For your clients sake and yours I hope it's just an error but you never know what their true agenda is.
Keep us informed on your scenario.
-Micki
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Micki - The value is not the issue. This is a COOP, too, where the list price was set, and the offer is about there. I think it MUST be a file mix up, but I don't understand how. Thank you for sharing.
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Thanks Wendy..I knew it wasn't a value issue for you but still thought it odd considering all the other things I've seen and heard. I'm hopeful that yours is indeed just a mix up and I'm sure you'll get it straightened out.
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Now I am being told: I am sorry but this has offer hasnt been accepted. I dont think it has anything to do with the death of the husband that happened back in 08. I suggest trying to sale this home the traditional way.
I am going to escalate the file now.
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I cannot get a straight answer, now the negotiator says the following. I am going to call Fannie Mae directly about this.
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Fannie Mae just told me they would not help me. They stated I am to work directly with the "servicer" on this. I relayed the servicer, Bank of America, stated Fannie Mae stated the file was declined due to no death of co-borrower, etc. I relayed the servicer was just "passing along the comments" from Fannie Mae, per the servicer. Fannie Mae rep re-stated four times, you must work with the servicer.
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Permalink Reply by Jeff Payne on
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Wendy, let me dig up a Fannie Mae contact and send to you, might take me a minute....
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Thanks, Jeff. If Fannie Mae has a press release with their new short sale criteria, but they don't apply them, why are they even made public? This is all over the news, yet on day 1 of the new program, I have a denied Fannie Mae short sale with a DEATH CERTIFICATE. Yes, the person died in 2008, but the partner has drained all his savings and is at the end. The estate was just settled and it was quit-claimed to him in 2012! I called Fannie Mae's general number and get a rude party who just keeps repeating "work with Bank of America". Bank of America just says "We are passing along what Fannie Mae said". Fannie Mae must be accountable to its own published rules.
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