Comment

Comment by Jeanne Dominguez on February 17, 2011 at 5:06pm

Thanks Kevin...it looks like it's just luck if it will work or not!

Comment by Michael Schneider on February 17, 2011 at 4:42am

Kevin,

I do not know the precise "incentives" on a PFS sale, but I think that the Servicer is largely fee based, with a incentive that is not large enough to alter their behavior, and the FHA is covered by the insurance fund and the taxpayer, if necessary.

The financial incentives do not seem to be strong enough to achieve the greatest return on the distressed asset.

Except, for the agents, who get the hard-earned commission, assuming that the appraisal is FMV....

 

Comment by Kevin - Greenville, SC on February 17, 2011 at 4:17am

When the only thing Servicers and/or Investors care about and base 90% of their decision upon is one valuation of the property and don't look at the bigger picture (other supporting info) problems will and do arise.

Comment by Kevin - Greenville, SC on February 17, 2011 at 4:15am

Michael, Sadly you are correct.  I have two PFS currently in progress now.  One has been on the market over a year due to a high flawed appraisal and another went under contract and approved in less than a week because of a low appraisal.  I'ts a crap shoot.

 

Comment by Michael Schneider on February 17, 2011 at 4:11am

In my experience, the single largest flaw in the FHA/PFS program is the handling  of the appraisal.  If the initial appraisal is above fair market value (FMV), then it may well be impossible to sell the property within the 120 day PFS marketing period.

I have four FHA properties where the FHA appraised value significantly exceeds FMV, so there is no way to achieve the 84% threshold. And, the Servicer will no complete a variance request.  The properties just sit there.  I tell WF, BofA, HUD this isn't going to work, but they do not seem to care.  They have no skin in this, they just sit back and let the property move to DIL or foreclosure.

I escalated this to FHA , wrote a memo, sent to Commissioner Stevens et al., and talked with the Director of Single Family Asset Management.  She said:

She has never heard of this problem before.  No Servicer has ever brought this to her attention.  FHA does not think that any action needs to be taken, because they don't think there is a problem with Appraised Values exceeding FMV.  If the appraisal is performed by a FHA appraiser, then it must be well formed.

She was simply not interested in feedback based on real experience.

It does not seem to matter to the FHA whether the property sell or not.  PFS works because the agents are motivated to sell the property, not because the FHA or the Servicer is engaged, they are not.

Comment by Dawn Green on February 17, 2011 at 3:16am

Hi there. This is awesome. Kent I will email you later today and I really appreciate this. Kevin I am waiting....he (GMAC) took a turn the other day after he did something (deleted my email without reading it and I called him on it) so I am waiting to see if, finally, this current show of cooperation will hold.  We just resubmitted the offer and he was in agreement that due to this new appraisal being a 203K they "HAVE" to at least consider it.  The better part of valor is telling me to at least wait until we get an answer on the newly submitted offer package.  Thoughts?

I am so thankful for this thread.  I have been reading it faithfully and I just can't express enough how wonderul this site is. 

Looking forward to talking again later and will let you know what the outcome is. 

Comment by Kevin - Greenville, SC on February 17, 2011 at 2:55am

Dawn,  Have you tried escalating to a VP @ GMAC or contacting the FHA's NSC?

 

Try contacting if you are unable to resolve at the servicer level -

Darrell Powell

[email protected]

 

 

 

Comment by Kent Dills on February 17, 2011 at 2:50am

Dawn, email me at [email protected] and I may have something that will help with your current HUD short sale issue!

Comment by Dawn Green on February 17, 2011 at 2:44am

Hi Kevin

GMAC.  He is insisting that he is getting denials from HUD  - that they will not consider an appraisal done by the  buyers bank and he indicated, that they were standing firm on the appraisal(s) that they have and no impression was given that another would be done at any time.  GMAC's HUD was submitted 12/24 and was riddled with errors including lot size, bath count etc.  We only received 2 pages and I had to beg for the repair page.  This home has some major issues including failed septic.  The buyers was done some two weeks ago and was SO much more complete and  correct. Ironically - both have the same repaired value.  The difference was in the cost and the items to fix.  I was present at both and both appraisers received the exact same information.  The comps were also far from the same and the new appraiser had the most accurate comps.  I have had little to no cooperation from GMAC - I have had to adopt the "walking on eggshells" attitude with this guy - very uncomfortable and extremely difficult to do one's job with absolute lack of communication. Honestly, when this is over, I am writing a book!  Any help or suggestions will be greatly appreciated.

Comment by Kevin - Greenville, SC on February 17, 2011 at 2:28am

Dawn,  Who is telling you that HUD will not consider another appraisal?  How long has it been since one was completed?  Did you and the homeowner receive a copy?

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