WF FHA Short Sale -- Seller Monthly Surplus
I am working on getting a client approved into the PFS Program with WF. The seller is not behind on their mortgage or shows a monthly deficit yet, but is being proactive since he is being transferred out of state and will not be able to afford the property once they relocate. The property is underwater and he is not capable of renting at a price which will cover the mortgage.
We have just gotten HUD's approval on a variance for the seller having a surplus in savings and thought we were moving forward and would be receiving the ATP. Since WF had taken 3 months to get to this point, they requested we update all documents (which were exactly the same as we first submitted--no changes in savings, income, expenses, etc.)
This morning we got a message from the Representative saying that after they looked at the pay stubs and inputted the information that they showed a surplus (which was shown on the original documents 3 months ago too). She stated that with FHA the seller must have a deficit to proceed otherwise she will close the file. She gave us a new task to revise the document and be sure all expenses were included and gave us a deadline of noon today (she sent the email at 9am).
I have already put a call into HUD since we had an open case number, but they just return calls within 24 hours. Any advice on how to handle the situation? Has anyone gotten an approval into the PFS program prior to the seller showing a deficit? This seller wanted to be sure the house was being maintained and would relocate after the property was sold--the company he works for is being flexible with him on timing of their move.
Thanks!
Katie
Replies to This Discussion
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Permalink Reply by Irene Medina, PA CRS GRI CDPE on
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Katie I just saw this and I see no one has a reply. I have the same situation. FHA with Chase and house is in florida. My sellers relocated to texas 2 yrs ago and rented the house. The tenants just relocated to texas and the sellers do not want to keep the house. The rent also doesn't cover their monthly expenses. They have been denied twice because HUD says they can afford both houses. so they are forcing them to either let the property go into foreclosure or keep a 2nd home they don't want. Yesterday they were told they can apply for a DIL. Doesn't make sense!! have you been able to resolve your seller's situation? would love to know. My sellers are willing to even sign a note. The deficiency is only around 70k. they have not even given them not option.
thanks!
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Permalink Reply by Katie Mitchell on
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Hi Irene,
We are actually about to come back on the market this week and I will let you know how it turns out. Our short sale file with WF got cancelled since we had a surplus of monthly funds and they would not approve us into the PFS Program prior to having an offer with the surplus. (We did however get variance approval for surplus in savings from HUD prior to the file being cancelled.) I did speak with HUD and they said that with an offer in hand that they would consider a variance, but that they could not approve us into the PFS Program prior to an offer with the seller's situation. We will see how it goes this time around.
My client would be showing a major deficiency once he relocates, but wanted to sell the house prior to relocating. His employer is working with him and allowing him time to try to settle things before requiring him to move. Worse case my client will be forced to move and start missing payments since prior to approval since they will not be able to afford the expenses of owning a house and renting a new place.
Thanks!
Katie
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Hi Katie - I have the same exact situation going on with one of my clients. Have you had any success or any updates to this? Please let me know when you get a chance!
Thank you!
James -
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We are under review right now--I will let you know how it goes!
Katie
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