Chase FHA Loan: HAFA Approved, PMI kills approval??

I don't know if this post goes in Chase, HAFA, or FHA but I'll give this a try here:

I have a client with an FHA loan.  Chase insisted we could do HAFA and so we did.  They got so far as to say that  HAFA was approved and that they were going to send the offer and file in for final approval.  They promised the sellers 3k.

Then the PMI Company jumps in at final approval and says, "We don't participate in HAFA" and cancelled the approval.  I didn't know FHA loans could do HAFA nor did I think that a PMI company could shoot it down.

The file is still technically "open" but it seems to me like we probably have to start over.  When we asked, what's going to happen next?", they DIDN'T KNOW!  They're going to "escalate it" and see what happens.

Besides the fact that the sellers aren't going to get 3k, we still want to close in a reasonable timeframe--like next week :)

Where do I go from here? has anyone ever had a similar experience with Chase and if so, what ended up happening?

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Replies to This Discussion

Permalink Reply by Kevin - Greenville, SC on July 12, 2012 at 11:54am

FHA Loans don't qualify for HAFA.

Permalink Reply by Neil L. on July 12, 2012 at 12:02pm

Ok, so i dug deeper and realized that it's NOT fha.  I don't know how i could have missed that! lol.

So take my original post and condense it:  My new issue is this:

Can PMI cancel HAFA and if so, why didn't the lender tell me that the PMI company didn't participate in HAFA up front?

Permalink Reply by Barbara Wing on July 13, 2012 at 2:35am

I had a ss getting close to approval with the $3k HAFA on the HUD when at the last minute I was told the loan did not qualify for HAFA...I went up and down the chain of ccommand and told everyone involved that the seller was not closing unless he got relo money and he did not care where it came from..the buyer and realtors were not willing to break the law, so no monies from that source....two days later Chase approved HAFA

Permalink Reply by Neil L. on July 13, 2012 at 3:08am

Was PMI Involved?

Permalink Reply by Barbara Wing on July 13, 2012 at 3:23am

I didn't really care who or what was involved...I just was adamant about the fact that the seller would live there as long as he could and would probably file bk or anything else he had to do to stall the foreclosure if he did not get relo money.  OR we could close in a few days...I threw the ball back in Chase ballpark and let them figure out where the money was coming from...HAFA was miraculously approved??!!

Permalink Reply by Jim Schneider on July 13, 2012 at 7:17am

PMI is HAFA's achilies heel, especially because sometimes PMI is purchased by the investor without the homeowner's knowelege. As soon as you hear PMI, ask them which company. If they "can't" tell you, start faxing your LOA to each of the major PMI co's, then call through, chances are with about five faxes you can find who's ruining your file. I find that going direct to the PMI co and finding out what can or can't happen can save your file. More often, PMI is not saying the servicer or investor can't do the short sale, just that the short sale company won't pay out for that short sale, then the investor is better off with a foreclosure and PMI payout than a short sale with no PMI payout.

Permalink Reply by Patrick James on July 26, 2012 at 6:09am

MI companies kill HAFA deals about 90% of the time they are involved.  MI company almost always wants a contribution, and there can be no seller contribution to the sale with HAFA.

Permalink Reply by Neil L. on July 26, 2012 at 6:12am

Thanks for the responses

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