Comment

Comment by Kevin - Greenville, SC on November 15, 2011 at 8:35am

http://4closurefraud.org/2011/08/07/hud-settlement-bank-of-america-...

Comment by Kevin - Greenville, SC on November 15, 2011 at 8:33am

Here is the answer Matt Martin provided -

 

'HUD is not offering any additional incentive above the $1,000 or $750.  On certain Bank of America loans, BOA is paying an additional incentive amount up to $3,000 due to a settlement with HUD on those loans.  It is not on all BOA loans'

 

Comment by Jim Schneider on November 3, 2011 at 3:43am

@ Jim Steward, according to Mortgagee letter 2008-43:

 (page 8)

Property Condition

Properties that have sustained damage may be eligible for the PFS option. If the cause of the damage is fire, flood, earthquake, tornado, boiler explosion (for condominium’s only) or mortgagee neglect (i.e., surchargeable damages as defined in 24 CFR Part § 203.378) mortgagees must obtain prior approval from the NSC at the address above. Prior to seeking this approval, the mortgagee must obtain the government’s estimate of the cost to repair the surchargeable damage by contacting the HUD Management and Marketing (M&M) Contractor with jurisdiction for the geographic area where the property is located. A list of M&M Contractors can be found on the Internet at: http://www.hud.gov/offices/hsg/sfh/reo/mm/mmingo.cfm. Pre-Foreclosure Sale Procedures Page 9 of 18

Upon receipt of the government’s repair estimate, the mortgagee must submit a Form HUD-90041 (

In accordance with 24 CFR Part § 203.379 mortgagees are responsible for the cost of surchargeable property damage. If the property is being sold "As Is" subject to the damage, the mortgagee will be required to deduct the government’s estimate of the cost of the damage from its PFS claim (See Appendix A - Claim Filing Instructions for Item 109).

Request for Variance) to the NSC to obtain the approval needed to enter into a PFS Agreement with the mortgagor.

If the property is being sold "As Repaired" and funds for surchargeable repairs will be escrowed or provided as a credit to the borrower at closing, the amount of the repair escrow or repair credit is not an allowable settlement cost as defined in Section J of this ML and may not be included in the net sales proceeds calculation.

If the damage is not surchargeable it is not necessary to obtain approval from NSC prior to approving the PFS Agreement. Regardless of the cause of the damage, the mortgagee must work with the mortgagor to file a hazard insurance claim and either use the proceeds to repair the property or adjust the claim by the amount of the insurance settlement (non-surchargeable damage) or the government’s repair cost estimate.

Mortgagors are required to disclose any property damage to the mortgagee during the application or after the PFS approval. In the event a property sustains significant damage after a mortgagor has received approval to participate in the PFS program, the mortgagee must re-evaluate the property to determine if it continues to qualify for the PFS Program and terminate participation if the extent of the damage changes the property’s FMV.

So he may be responsible for the repairs, but still elligible for the program. Could he use the sale incentive towards the cost of repairs or the insurance deductible?

Comment by Jim Stewart on November 3, 2011 at 3:28am

FHA short sale with Midland Mortgage. Seller needs short sale due to $1000/mo income shortfall and damage to the home which he does not have the money to fix. Midland says short sale denied because of condition of home. Home must be fixed first. Insurance money won't come close to fixing the property and seller doesn't have the cash to fix. Any suggestions??

Comment by Victoria Frieberg on October 24, 2011 at 1:52am

ATP finally showed up out of the blue on my conversation begun a while back on this board.  They have had the offer since August, resent to Wells, they wanted the listing agreement changed to read a lower listing price..sent that back on the 19th, asked negotiator to begin variance procedure for seller paids..she agreed.  Called back, new negotiator..in review...allow 45 days!  Offer is within ATP amount, including the seller paids net is sufficient, with about 200 to spare.  Seller has offered HAFA incentive to also be included..sent HUD to show that also..

Comment by Kevin - Greenville, SC on October 23, 2011 at 8:07am

@Michael, I've gotten them to send the denials....I finally got it closed with another Appraisal.

http://www.scribd.com/doc/69993511/HUD-90041-Variance

 

Long story (aren't they all). When the Short Sale was finally approved under the %'s of the new Appraisal, Wells Fargo ended up netting less than if they would have approved this one of two variance requests...

Comment by Michael Schneider on October 23, 2011 at 7:54am

@Kevin I've had quite a number of variances approved for PFS, eg, for closing-credit exceeding 1% or for waiver of the 88/86/84 net proceeds rules.

But, I've never received any documentation from the Servicer, as they handle the request on behalf of the mortgagors.

Comment by Kevin - Greenville, SC on October 23, 2011 at 7:45am

Who has some FHA PFS variance approval's they can send my way for my records?

Comment by Michael Schneider on October 20, 2011 at 4:19am

@Jim  I think it is in writing, in the demand letter, which we generally refer to as the short-sale approval.

I think the risk is that Servicers are already bound by FHA's guidelines, which in my view already makes the risk of failure on PFSP too high.  Presumably, this is not just Citi, as Citi's responses seem quite reasonable (on first read), particularly given the realities of dealing with FHA short-sales.

So, this can only cause risk-of-failure to increase, making a PFSP short-sale even less attractive.

Aside from the concerns .  People would want to understand more about PFSP should read the text.  It is incredibly informative about how the program works.

Comment by Jim Stewart on October 20, 2011 at 3:57am

I would tend to agree with your analysis.  My concern is that, as you know, in this business, if it ain't in writing....

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