Comment

Comment by Jennifer Sperlak on April 11, 2011 at 7:11am

I had a cash contract on my condo in 2010 and HUD denied my shortsale because of the amount of time that had passed between my moving out of my condo and my delinquincy and because my delinquincy was not due to my moving out.  I moved to CO in 2007 for my job, I tried to sell my condo 3 times and could not sell it.  I let my sister live there while I paid the mortgage, so I never even rented it out to anyone.  In 2009 my husband lost his job, we took legal guardianship of a 4 month old child (and had already bought a home in Colorado); therefore I stopped making my mortgage payments as of 1/1/10.  I actually lost 2 cash contracts in 2010.  The final answer came from HUD in October and there was no talking to the lady at HUD.  It's like she was reading a script and would not make any exception.  So my attorney and negotiator told me it was dead and just needed to let it foreclose.  It is now mid April 2011, it still hasn't foreclosed and I have no idea when it will.  THE SYSTEM SUCKS!

Comment by Inaam Rahman on April 11, 2011 at 6:46am

Have a CITI/HUD short sale that kept being refused due to the borrower not living at the property anymore. (this was her primary residence for at least 12 years before she moved out). Had it rented and applied all funds to her mortgage until the HOA evicted the tenants. The unit has been vacant for over a year and has $10k in past due HOA fees.
We have a buyer in contract with a commitment ready to close within 10 days.
CITI keeps telling me the borrower doesn't qualify under the HUD guidelines so I made them apply for a variance, which they did, and HUD is also telling me she doesn't qualify now.
I thought the point of a variance to look at the file individually and make a logical decision. Why would they want to deny the short sale and lose the buyer, resulting in a foreclosure 7-8 months later?
I understand why CITI would deny it, because they get paid at foreclosure anyway by HUD, but why would HUD pass on this knowing they will net less??
Can anyone help or advise?

P.S. I emailed Darrell twice, no response.

Comment by alisa hagner on April 6, 2011 at 5:53pm

I have an FHA short sale seller, who filed for bk, has been discharged.  The bk attorney says he needs $1,000 to file an answer to the relief of stay motion - on a foreclosure sale that has not been filed, but it will be in two weeks.

 

I say this is not what has happened to other FHA sellers.  You do not have to file any motion, the sale will take place 120-125 days from filing and we are 45 days away from closing.  

 

The appraisal has already been done, but it is not in yet.

 

alisa

Comment by Barbara Thomas on April 2, 2011 at 10:13am

Thank you, all, for your good guidance.  Yes, we do have an ATP (issued 1/28/2011) -- so in theory 86% of the "as-is" appraised value should be acceptable (offer received 3/8/11).  I also emailed the HUD contact (Darrell Powell) that someone else suggested but have not heard back from him.

Comment by Kathleen Lordbock on March 31, 2011 at 2:39pm

Where I am at in the Brainerd Lakes area of MN, with our declining market values- continued marketing will almost surely net a lower sale amount. That whole concept is echoed by the 88% to 86% to 84% HUD standards. Interpretation of that seems to be at the discretion of the negotiator.

 

Comment by Ed Bemis on March 31, 2011 at 7:47am

@Barbara. I had a similar thing happen. The property was appraised a second time which muddied the date waters a bit. Darrell was kind enough to cleart that up saying the date of the second appraisal had nothing to do with the ATP date or acceptable net. Even though the property had been issued an Approval To Participate more than 60 days prior, the negotiator said that unless the next offer met or exceeded the 88%, he wouldn't look at it.
ML 08-43 states
”… 4. Mortgagees have the discretion to deny or delay sales where an offer may meet or exceed the 84%, if it is presumed that continued marketing would likely produce a higher sale amount. However, the mortgagee is still limited to 4 to 6 months after the date of the mortgagor’s approval to participate in the PFS Program.”…

A strict reading of this would seem to indicate that even if an offer meets the 84% the offer can still be denied. Since the 84% is specifically mentioned, the intent seems to be clear that the 84% is what is being addressed. My negotiator seems to think that this applies to the 86% and the 88% as well. That certainly is not the way I read the intent, nor the words. I am interested to hear other interpretations.

Comment by Michael Schneider on March 31, 2011 at 7:31am

Barbara,

I think this probably is under the Servicer's discretion, if they believe that continued marketing of the property will produce higher net-proceeds.  I do not think that the FHA mandates that the Servicer must accept any offer that meets the minimum net-proceeds.

If this were me, I would counter the buyers as requested by the Servicer, in the manner they have directed you to, and try to get the higher price.

Our obligation is always to get the highest and best.

If that fails, then go back to the Servicer.

 

 

Comment by Paola Martinsen on March 31, 2011 at 7:27am

Do you aleady have an ATP?

Comment by Paola Martinsen on March 31, 2011 at 7:25am

Barbara, just go back and tell them the buyers final offer is 139,250. As long as you are meeting the min required net for the marketing period you are in then your offer will be approved. If they refuse, then escalate.

Comment by Barbara Thomas on March 31, 2011 at 7:15am

Lender is Wells Fargo. FHA "as-is" appraised value came in at $143,000 requiring net proceeds of $125,840 at 88%. We received a clean offer at $139,250 - 20% down conventional financing. No Seller concessions - no special fees. Net payoff to Wells exceeds the minimum by $2,725. WF Negotiator came back today and said we have to counter the offer back at "best and final" to $143K.

Is this allowable?  I'm tempted to call their bluff. I do FHA short sales all the time and have never seen a counter when the minimum is met and we are not asking for special exceptions (e.g., additional closing costs /repairs, etc.)

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