B of A Refuses to Allow Seller Paid Utility Bill from HAFA Relocation Incentive
The HAFA Supplemental 11-08 released last August, says the seller can pay delinquent utility bills from the Relocation Incentive, providing the seller provides written directions to do so. I am involved in a UTLS Bank of America HAFA short sale. The negotiator is refusing to allow the payment on the HUD.
Has anybody else encountered this? I am wondering if the reason for the rejection -- because they never tell you -- has to do with an interpretation of the Supplemental. Part of it says the seller cannot pay non-mortgage recorded liens. The delinquent utility bill is a lien against the property.
But if that was the intent of HAFA, then why allow it in a Supplemental? Because nobody would agree to pay a utility bill from the HAFA Relocation Incentive through escrow unless the utility bill was preventing the close of escrow. And the only way to prevent close of escrow is to record the lien against the property. But it wouldn't be the first time the government hands it to you with the left hand and takes it away with the right.
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Permalink Reply by Linda Solomon on
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Elizabeth, Did the negotiator say why it wasn't being allowed on HUD?
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Permalink Reply by ElizabethWeintraub00697006LyonRE on
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One day they would approve it and the next day they refused. No reason given.
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Elizabeth, I just read the supplement I think the issue is the utility bill is not a transaction cost for example like prorata costs etc. It has changed from being simply over due to being a lien. Also, the supplement distinctly precludes subordinate mortgage and non mortgage liens from being paid out of the relocation assistance.
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I hate it when I am right -- the negotiator confirmed my suspicions -- they don't want to approve the utility bill because it is now a lien. Just like I suspected. But what person of rational mind would pay a utility bill if it wasn't a lien? They'd wait until much later to pay it, if they paid it at all. HAFA should state that utility liens are acceptable, which I believe is the intent but it's so oddly worded that it could be denied on that basis. Only the government would make a ruling like this. Yes, we'll authorize it unless you really need it to be authorized and then we won't. Simply brilliant.
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Permalink Reply by joe beauchamp on
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I got almost instant and accurate response from [email protected] when I disagreed with a negotiator's statement. Be very specific in your question. For instance, you did not say who the investor is. FNMA/freddie have nothing to do with the later supplements - in fact, I learned from the HOPE Hotline that FNMA and Freddie each have their own HAFA, called the same but NOT HAFA and HOPE cannot speak about "private" HAFA programs - but then out of my several calls to them, this is the only thing I ever learned from them. ;-)
Even so, I had an experienced negotiator (because of multiple screwups at AMS/BOA), had the reps confer at AMS and agree with me, because I had been dealing also with escalations, I conferred with them and they also agreed with me. Yet, it took multiple times hammering on the negotiator, giving him the info from HAMP, the quote, the fact that their reps and escalations agreed with me, to get the negotiator to agree. Oh, surprise, by then the buyer had walked...such is the life of short sale dealing, eh?
So, if you know you are right, you may have to be very persistent to get the proper response from the negotiator.
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