BofA first, PNC 2nd. HAFA approved, running into issues

Here is the situation:

BofA first - Approved for HAFA and received the RASS. Got an offer and BofA has countered the price, but is also asking for an approval letter from the 2nd (PNC) accepting $6,000 as payoff and releasing the seller from further obligation.

Does BofA need the PNC approval prior to issuing their approval?

PNC is a pain... I know for sure they won't take $6,000 because I've reached a settlement with them a few months prior before getting accepted for HAFA with BofA. At that time, PNC agreed to take $32,000 to settle the account with no deficiency. The sellers were ok with that.

Now since we are going through HAFA with BofA, we were planning on getting the BofA approval, negotiate the 2nd, wire the difference ($26,000) to PNC about a week prior to closing ($32,000 minus the $6,000 being paid by BofA) and then get a revised approval letter showing $6,000 as payoff and no deficiency.

Can we still do it this way?

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Replies to This Discussion

Permalink Reply by Heather Robins on April 22, 2011 at 6:02am

Where are you getting the 26K from? The Buyer? The Seller? If it is from the Buyer there is no way BofA is going to approve that and it is doing a transaction under a transaction not very legal. If it is coming from the Seller have PNC approve two ways, 26K cash from the Seller prior to closing and 6K on the HUDS from the sale of the property via the Buyer or Seller or Agents.

Permalink Reply by Joe Barnwell on April 22, 2011 at 7:42am

The 26k is from the seller. the remaining 6k is what BofA is willing to give PNC

Permalink Reply by Michael Hayley on April 26, 2011 at 1:22am

Heather, I am learning from your comments: If it is coming from the Seller have PNC approve two ways, 26K cash from the Seller prior to closing and 6K on the HUDS from the sale of the property via the Buyer or Seller or Agents.

Would BOA approve this? Do they have to?

Permalink Reply by Joe Barnwell on April 26, 2011 at 1:30am

I don't see how PNC would issue two separate approvals without some sort of notation on each approval that it is subject to the other

Permalink Reply by Tim W on April 30, 2011 at 4:00am

Be careful about giving PNC any cash before closing. They are know to take the cash and than kill the short sale. Once they do that you go to standard short sale and they will not negotiate or you will have to come up with cash. PNC rarely agrees to HAFA if they are the second. We have gone the standard short sale route with all deals with B of A as primary and PNC as second.

Permalink Reply by Tim W on April 30, 2011 at 4:21am

BTW we are not doing HAFA any longer if there is a second with with B of A as primary. We have found that B of A will do Hafa approvals quickly knowing that the second will reject. HAFA becomes a real distraction since it extendeds the time to get a short sale done. I would like to see the stat's on how many of the sales actually go through the whole HAFA process successfully.

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