Replies to This Discussion

Permalink Reply by Smitty on October 19, 2012 at 8:19am

Not to my knowledge.  Ownership has now reverted back to the lender.

Permalink Reply by joe beauchamp on October 19, 2012 at 9:17am

You can continue any efforts you have going during the redemption period. That is not commonly known.

Permalink Reply by Derik Bjorgo on October 19, 2012 at 9:29am

Thanks for your reply Joe. I thought so myself. How do I get BOA to move forward with my deal? It's been 2 weeks and still no one has any answers. They are telling me due to the loan being FHA the homeowners only option is to Redeem, after they told me to get an offer and submit the Short Sale Docs they requested.

Permalink Reply by Rachael Babinchak on October 19, 2012 at 9:32am

I'd call FHA direct.  You'll need the case number, send auth.

Permalink Reply by Derik Bjorgo on October 19, 2012 at 9:34am

I've done that already. They had no idea and are slammed so everyone is very short with me. They sent me to BOA's escalation department, once again no help there.

Permalink Reply by joe beauchamp on October 19, 2012 at 10:13am

I actually learned that years ago from a friendly MI person (if you can believe that!). Considering that normally FHA at BofA is outrun by a turtle with 3 legs tied down, and FHA escalation means calling HUD to have your call routed to BofA reps directly, and that working out anything during the redemption period is pretty much unheard of, I'd say finding someone in a thinking mood at BofA to help you with a logical but uncommon solution is not likely.

First, what is your redemption period? Some places it is a couple of days and I think others go into a few months. Pretty important. Next, you'll want to have everything as "falling in front of your face" simple to complete as possible - you need to rub their noses in the answer w/o letting them object. As in, "here, sign this and we are done." Anything that requires them using an IQ above 100 and you are asking for an objection.

Because this is legal and pretty well unknown, you could be best off by involving a lawyer. However, because this involves a local homeowner losing his house to a swell big bank, your use of a lawyer could be to get a judge to retract or postpone the sale. Judges like local votes and aren't overly fond of big banks. I think you probably need something like that to hit the BofA people over the head to get the brain gears moving along the lines of logic vs. the usual bureaucratic "we can't do that" mental stance that they daily pound out.

Your story has to be clear and compelling - this is to save the homeowner from foreclosure, you have the solution, BofA refuses to let you continue so that both the homeowner and the investor are better off, including a happy home buyer and people paid to get this done. And BofA's position is? We like to foreclose and get more money out of the investor for REO, etc. while screwing over another homeowner suckered into one of our loans by our rich and now missing loan officers of the day.  Hmmm...

Permalink Reply by Derik Bjorgo on October 19, 2012 at 10:38am

Thanks for your indepth thought! Our redemption period here in MN is typically 6 months. Unless home is vacant. At this point we've been told we have until sometime in early January until end of redemption. I'm on the phone as I type with BOA. I've now been told a letter has been sent out to BOA from FHA that they no longer accept Short Sales that are in the redemption period. I've asked for proof of this seeing I couldn't find a single thing on HUD's website regaurding Post foreclosure Short Sales involving FHA loans. According to BOA these new guidelines were just passed down from FHA. ?? Has anyone seen these new guidelines?

All for $1,060.00.....lol am I crazy or just determined to help these people?! sometimes I wonder....

Permalink Reply by Kevin - Greenville, SC on November 6, 2012 at 12:11am

I'm not aware of any restrictions that HUD has in place for Pre-Foreclosure Sales during the redemption period.  Obtain a good offer and submit.

I'm currently helping out a Client where the commission paid to my Brokerage is $285 (yes, $285) that's before my cut of the pie and I think I owe a referral here too.

Permalink Reply by Theresa Lee on November 19, 2012 at 5:41am

Did you ever have any luck with BOA?  I am running in to the same issue with one of our short sales, I was told today (by BOA) that FHA will not do a short sale in the redemption period.  Any new insight you have is appreciated!

Permalink Reply by Kevin - Greenville, SC on November 21, 2012 at 6:29pm

Question 1 - Can a Lender allow a Borrower to participate within HUD's Loss Mitigation Program during the Redemption Period?

Answer - Yes, the Borrower is still the legal owner of the property during the Redemption Period.  Should the Borrower approach their Lender with a solid case as to why a Loss Mitigation Option should be utilized, the Lender should work with the Borrower to completion of the Option. 

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sf...

Permalink Reply by Dennis Yoo on October 23, 2012 at 7:02am

I just tried a short sale in the Michigan redemption period. The home owner had 1 lien with Bank of America which was an FHA loan. I tried to initiate the short sale via Equator and was told to call an 800 number because it was a government loan. When i called in, I was sent to the Home retention department, the REO department, and the loss mitigation department. Everyone I spoke with was confused until I was pointed to the CRM (customer relationship manager). They asked me to have the homeowner call in to update their financials in their Profiler system. Once completed the bank finally said, the loan was an FHA loan and they do not allow a short sale in the redemption period.

I called the FHA HUD office to confirm and was told the same thing. I wish someone would have given me a heads up before I went through the entire process.

Hope this helps.

Permalink Reply by joe beauchamp on October 23, 2012 at 12:49pm

I had a conversation today with a top HUD guy. I thought of a few questions to shoot his way because I was getting solid answers. Here is his on this subject:

If a state has a redemption the property is still legally in the mortgagors name during this time so if there is an offer it must be considered, of course the offer must be a valid/realistic amount.  It’s not uncommon for investors to submit “bare bones” offers on foreclosure in redemption states hoping to get a last second deal but for the most part the net proceeds must still be at least 84% of the “as-is” appraised value.

HUD would always rather do a short sale instead of taking a home back via foreclosure and then selling as an REO property.

As I suspected, the information you are getting is from low level bank people who spout off w/o knowing the facts - get brownie points for taking care of things, so far as their supervisor is concerned. My guy was emphatic that HUD wants these short sales done and when the bank gets in the way, they want to come down hard. Very refreshing after dealing with banks all day...