Wells Fargo Denies HAFA Incentive due to HOA Lien

My seller has a mortgage and a line of credit with Wells. Recently I was informed that the file did not meet HAFA guidelines for the incentive because the HOA has filed a lien and somehow the HOA lien was filed in first position. The HOA lien and estopple fee is less than $6,000.

Any help/and advise on how to handle this situation would be greatly appreciated.

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Replies to This Discussion

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on May 29, 2012 at 5:34am

Well, that's interesting - how did the HOA get into 1st position? Was the HOA lien in place prior to the Wells Loans being taken out? Did you have Title check into it? Maybe Wells is mistaken.

Can you negotiate down the amount due to the HOA and have the Buyer pay it? Has Wells completely denied the short sale or just HAFA?

Permalink Reply by joe beauchamp on June 1, 2012 at 4:41pm

My understanding has been that HOA's have a special position - like local gov't liens - they don't wipe, they are there. I never looked into this in detail, just have heard this for years as an investor myself.

Permalink Reply by Marv Edelstein on June 3, 2012 at 12:51am

Joe,

That is the way it is in Illinois. I always check for HOA in arrears before I submit a preliminary HUD

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