Nationstar, FHA loan, mortgagor denied short sale eligibility and instead offered forbearance. Here is message from loan rep:
At this time the home owner is not eligible to participate in the short sale program because
she has a surplus of income. You can send me a message in the beginning of next month
and I can review the status of the account to see if we can possibly streamline the file.
That is if there is changes in the file. But as of now, she is not eligible.
Owner has already abandoned the property and fell behind on payments. She has no interest in forbearance, simply wants to avoid foreclosure.
In looking closely at the financial worksheets we submitted for her, I realized she had omitted a good chunk of her living expenses (food, clothes, rent she pays on new home, gas, entertainment etc). I asked her to complete those forms over again, including all expenses she can possibly think of.
Aside from resubmitting the financial worksheets with a more accurate depiction of her expenses, any other suggestions for her to be deemed eligible?
From the lenders' perspective, why would they do a short sale when she rented a new place - why isn't that rent going towards the mortgage?
Did she have to relocate for a job? Why didn't she include ALL of her expenses to begin with? Did no one tell her she needed to?
1st review her revised financials to see if she really cannot afford the payments. then...
2nd: provide a letter of explanation why the error was made.
3rd: you are now going to have to prove every line on the financial disclosure. Go through her bank statements and credit card statements for the past 3 months. Organize every charge into the categories of "food", "utilities", "rent", and so on. I suggest on a spreadsheet. Provide copies of your statements and the summary as proof.
Once you have a denial like this, you are going to have to fight hard to get the approval.
You can resubmit those....however streamline would be the easier way to go as she will have a hard time with FHA as a non owner occupant unless she moved for employment...FHA does not play nice when owners move out for no good reason.
As long as her credit score is below 620 and she is at least 90 days behind she should qualify for a streamline.