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Our experience is that FHA is still requiring borrowers to be a minimum of 30 days delinquent on their mortgage before CLOSING a short sale in their PFSP. They do not have to be delinquent to start the PFSP process, just by the time it closes, but the servicers we've dealt with won't issue approval until they are 30 days delinquent, even though legally they could, as long as the SS doesn't CLOSE prior to the borrower being 30 days delinquent. On our FHA SS's where the borrower is current, we have them miss their 1st payment once we know we are about to get approval so that closing can occur before they have to miss the 2nd payment. This issue can be explained in a letter to the new lender who is about to issue them a new loan, and substantiated with PFSP Guidelines. The 30-day delinquency requirement is written there.
The other investors we work with (including VA) have a little more common sense than FHA, and don't seem to require delinquency in order to approve a short sale. Good luck!
Hi Stephanie,
I successfully closed on a short sale where my clients never missed a mortgage payment. They had to re-locate from AZ to Colorado to take care of elderly parents. They were actually able to purchase another home right away. They did not have a second, and their mortgage was with B of A. It was not a Fannie Mae, or Freddie Mac. You need to make sure this hardship is rock solid, otherwise they may not even give him the time of day, until he has missed payments.
Confused. Is he short selling his home? Or his mother's? Is he on her mortgage?
I have done it with Wells and been denied by Wells. It depends on the investor. PNC denied it once.
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