Living in property within the last 18 months, is that a guideline?
I have a FHA short sale just declined because the owner has not lived in the property for the past 18 months. He purchased the property in 2006 and lived there through 2010. He got married and started a family. The condo was too small for them. He moved into a house his wife purchased and listed the condo for sale. He was not able to sell it so he rented it out. It was owner occupied, it was not purchased as an investment property. He attempted to remain in good standing with the bank, CitiMortgage. The tenant stopped paying rent and the owner had to evict her. That's when he decided to do a short sale.
First, is living in the property in the past 18 months a guideline? I called FHA, they said it was not. We had negotiated the contract and waited for 4 months. We had a verbal approval from the negotiator as it was a good contract and the homeowner qualified for the short sale until the investor declined the deal.
I cannot find a FHA case number. CitiMortgage has already closed the file and this all happened on Friday, November 16. Is there a way to file a claim with FHA without the case number?
Does anyone have any suggestions? How can I confirm this is a guideline?
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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The guidelines states: "....or used as a rental for more than 18 months."
Here's the FHA PFS guide. Look on page 2 for eligibility requirements.
All FHA info can be found here http://shortsalesuperstars.com/group/fhashortsales
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Permalink Reply by Maureen Nichols on
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Yes, it is a guideline; these guidelines can be found at the HUD website. I had very similar situation. We were denied 3 times due to the 18 month guideline. Called in our State Senator (as seller had security clearance and was a Veteran, we needed this to go short vs foreclosure.) Senator Mikulski (Maryland) got FHA (National Servicing Center) & Bank (Wells Fargo) to review and they finally made an exception to the 18 months I think because the deal made sense - the sales price was at market value - and once we got them to look at the whole deal, and showed them they stood to lose much more if it went to foreclosure, and due to the fact the seller did just like your seller did - tried to do the right thing, rent it and wait for property value to increase...
The "investor" or "insurer" is FHA with an FHA loan. The case number should be on the Deed of Trust, first page, in a little rectangular box. If your state doesn't use DOTs - it should be on your seller's HUD1 Statement with Citibank.
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Thank you, Bryan. The property was not rented for more than 18 months. It was a 1 year lease. Where does it say the owner must be living there in the past 18 monts?
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Permalink Reply by Kevin - Greenville, SC on
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The Guideline is simply for what the Servicer has delegated authority to grant without Approval from HUD. Request the Servicer submit a Variance requests regarding the situation.
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Thank you, Kevin. Because the file is closed and negotiator nor his supervisor is returning my messages, do I, basically, need to start over again?
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Robin, first let me tell you this: DON'T LOSE HOPE!
I was in a similar situation, having purchased a house, living in it alone initially, then with my wife after we married, and finally moving across the country when I accepted a new job. Wells Fargo denied me because I rented out the property for more than 18 months, which as you know is a HUD guideline. As Daryl pointed out, ask for a variance. In my case, Wells Fargo told me they submitted two variances, but those were never passed on to HUD. I ended up contacting HUD and asking them to open a ticket. Basically a ticket is like an investigation, where HUD gathers all the facts about your case and determines whether any wrongdoing was done on behalf of the bank. This ticket can also reveal that you did not obtain the FHA loan to secure an investment property, but the ticket investigator MUST KNOW THIS. In my case, the HUD employee that conducted the ticket investigation called to say we were still out of luck, but we (calmly) explained we were doing the right thing. A day later we received a call from him stating that the variance was approved and we were then allowed to continue with the short sale process.
I apologize for this...it doesn't seem very organized, but I have limited time before I have to go. This process has been a major pain for the last 6 months but we are set to close on Nov 30....10 days away! My advice would be to call the bank often. I called 4 or 5 times a day at some points. Keep detailed notes of who you talk to, when you talk to them, what they tell you, etc. When you can repeat these things to the bank seem to become a little more straight forward with you. My bank (Wells Fargo) regularly lied to me about certain issues (initially saying they didn't deny the short sale, then saying they submitted two variances) so don't always accept their first response.
Good luck!
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Thank you, Bob. Who or what department should I contact at HUD?
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