How do I quickly get past the Loan Mod denial prior to a short sale requirement?

I noticed this post showing that FHA requires a loan mod to fail prior to doing a short sale: http://shortsalesuperstars.com/profiles/blogs/bank-of-america-pre-f...

The posts shows that the exceptions to this rule are:

DEATH OF BORROWER
DIVORCE
NO INCOME
RELOCATION OF JOB

I had a deal with Fifth Third close recently and the borrowers had not applied for loan modification first. Their hardship was bankruptcy and yet the negotiator put in a variance with FHA and it was approved. I'm not sure how they were able to do it.

Now I have a property that BofA is refusing to short sale until the modification fails. Only one of the two borrowers resides in the property and she is on disability. The other moved due to job relocation.

BofA made the out-of-state borrower deed the property to the one still in the property. They initially only wanted the financial information from the person in the home but now they want it from both. We're still in the loan modification waiting period. We know that it will be denied. Does anyone know how to expidite a loan modification denial?

Also, when one of two borrowers experiences one of the hardships above, does that qualify the property for a short sale or must it apply to both borrowers? Does anyone know?

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Permalink Reply by joe beauchamp on May 1, 2013 at 10:17am

The correct procedure is to have your seller call the FHA CRM at BofA (just call about any cust svc number and input account number and he'll be routed to the CRM). They need to go over the financials. The CRM must recommend a short sale before the SS dept can touch it. The CRM is supposed to determine if a loan mod is feasible. If he says that a loan mod makes sense, you cannot short sale. This is supposed to be an FHA criterion, however, BofA seems to make up their own quirky forms and rules at times.

No way around the step of the seller talking to the CRM about financials.

Permalink Reply by Neil L. on May 2, 2013 at 4:23pm

Thank you

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