Comment

Comment by Laura K Baldwin on May 18, 2010 at 7:27am

I have a FHA shortsale ready to close. The buyer has to close by June 30th so the closing date was set for June 28th. I sent everything in and asked for the closing docs. May 4th the BofA negotiator informed me they "don't issue the wiring and instructions and final demand letter until 3-5 days before closing. Is June 30th the soonest that you can close?" I inform him the cash buyer wants to close May 20th, please confirm this is ok. I've since called and emailed many times - no response. I figure maybe he wants a new HUD with a changed closing date, so I send one. Still no response. I finally email his supervisor yesterday (3 days before closing and still no docs) and she didn't get back to me so I call her today and find out she won't be in the office today or tomorrow. (The closing is scheduled for the day after that) Anyone have any suggestions? First, I'll inform the buyer/seller and title company that the docs have not come in yet. But what can I do on the BofA side? I've been on hold for 1/2 hour with shortsale support with no one answering. Any suggestions would be greatly appreciated!!!!!

Comment by Sharmayne Darzell Ballard on May 5, 2010 at 3:14pm

John - thanks very much. I read further on the Mortgagee letter and realized that it pays to read it all before trying to interpret anything! I appreciate you answering my question so clearly.

Comment by John Edelman on May 5, 2010 at 12:08pm

The net amount to the bank is the net amount that they will expect - the partial claim amount that is to be paid needs to still result in the lender getting their net amount. Consider it another cost (just like a release of a lien) that will be subtracted from the purchase price - but the end result is that the net amount due to the lender must be realized. I have spoken recently to another agent that tried to get the partial claim waived or at least get a variance for a net below 84% appraisal value - and he was told that HUD is no longer allowing this. They expect the partial claim to be paid in full and the net has to meet the limits.

Comment by Sharmayne Darzell Ballard on May 5, 2010 at 10:56am

Regarding a Partial Claim (HUD lien) on FHA short sale. I read the HUD rule as the Partial Claim being paid by deducting it from the net sale proceeds, based on the tiered payment, due the bank. (Mortgagee letter 2008-43) This is not how the BofA rep (phase 1) seems to understand it; he says tiered payment to bank plus the partial claim amount will be due. Anyone have experience with this?

Comment by Kent Dills on April 26, 2010 at 1:00am

John, I beg to differ. The appraisal price is the most important thing. As we learn from any number of short sale experts, managing the BPO (or in this case - the appraisal) IS THE MOST IMPORTANT THING! It sets the value from which the 88%, 86%, 84% stem from. I've successfully contested FHA valuations and gotten my shorts approved and once it was through exactly the scenario named by Elva - using the buyer's appraisal.

Comment by John Edelman on April 25, 2010 at 4:52pm

The appraisal price is not the important thing - what is important is netting the lender the percentage of the appraised price that they are expecting. Depending on the date on the ATP form will determine which tier of the 3 tier net program you are in. I am not sure if this makes sense, but on an FHA short sale you want to work backwards. You start by knowing if the purchase contract was received during tier 1, 2 or 3 of the PFS program. Then you multiply the appraised price by either 88%, 86% or 84% depending on whic tier you are in. This is the minimum net (or what the lender must see as their proceeds) on the HUD. You then add all of the seller side closing costs to the net number you had (title policy, property taxes until the day of closing, real estate commission, title company escrow fee, attorney fee, etc) and if the purchase contract price os above this number, then they will approve it - if not then they will not with the appraisal that they have. FHA had a process to contest the appraisal - your negotiator should be able to help you with this. I would think that they will look at your appraisal and likey use it. By the way, who is the servicer?

Comment by Kent Dills on April 25, 2010 at 10:09am

Elva, I've gotten a couple of lenders to accept an offer lower than that indicated on the Approval to Participate due to buyers' appraisals coming in lower. They accepted the appraisal as the value both times.

And, yes, it is true - to the best of my knowledge - about the FHA Appraisal sticking for ANY OTHER FHA BUYER ON THAT PROPERTY for 90 days.

Comment by Elva Branson-Lee on April 25, 2010 at 8:12am

Has anyone ever known FHA to consider a counter? In my case the buyer's lender also order an FHA appraisal which came in $5K lower than than the Approval to Paarticipate appraissed price.

Now, is it true that the lower apprasial will stick for anyone trying to use an FHA loan to purchase this property for three months?

Comment by John Edelman on March 24, 2010 at 4:25am

In my experience, and I have done quite a few FHA short sales, it is unusual for them to give a variance. I have gotten one varience - but usually don't ask for them. I work mostly with Wells Fargo on FHA - don't have as many contacts at B of A. I did talk to one negotiator at Wells about variances and he was not even aware of them.

Comment by Nina Sloan on March 24, 2010 at 3:42am

@John - BoA. Already working that angel since last week which got me to this point. I have posted this there too.

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