Replies to This Discussion

Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on November 3, 2011 at 11:40am

I just had a client tell me that yesterday.

 

Permalink Reply by Gwendolyn Harvey on November 3, 2011 at 12:38pm

What happens when the realtor has done all the work during the short sale process. It's like we are working for free if the banks are pulling this kind of stuff.  It seems if this is the case, we as realtors should receive some kind of compensation for our time. Otherwise, why do short sales if we aren't going to be compensated.

 

Thanks

Permalink Reply by joe beauchamp on November 3, 2011 at 12:40pm

HAFA will do this - for instance, if the HAFA w/o offer goes for the full 120 days w/o a buyer, the seller is eligible (possibly mandated) for the deed-in-lieu and that HAFA $3K.  I have done little research beyond this - if it gets to this point, I don't get paid and all effort/$ are lost for me..

Fastest way to get the info is to call in - SS reps know the common stuff, Home Retention should be able to give you more depth.

But remember, a deed-in-lieu looks a lot like a foreclosure on the seller's credit and a short sale looks a whole lot better. Is there a release of debt? What other things could come back to bite?

Permalink Reply by brenda rogers on November 3, 2011 at 5:01pm

Gwendolyn, It is my understanding that a HAFA Short Sale Agreement includes an agreement by the mortgagee/loan servicer that, and just let me say that it is a very vague statement with a lot of "may" in it, "may" pay the Borrower $3,000.00 for a deed in lieu if they are unable to sell the property according to the HAFA SSA. 

Depending on whether you live in a judicial or non-judicial foreclosure state, deed-in-lieu, may or may not be an option.  Don't expect that the person your client is speaking to will know the difference.  If you live in a non-judicial foreclosure state, a deed-in-lieu would not be applicable because of the difference in the State law governing foreclosures . 

I am going to assume, from your statement and question, that either you or your client has initiated a short sale in Bank of America's Equator system and that the next step, per Equator, is for your client to call and talk to BofA because they are eligible to participate in the HAFA program.  If I have assumed correctly, and your client has spoken with the short sale department, they should be aware of the fact that they can choose not to participate in HAFA and can pursue what they refer to as a "regular" short sale.

 

I would rather not state my opinion about Bank of America and HAFA in this forum.  I will tell you that when I interview a potential client for a short sale, regardless of the lender but especially if it is Bank of America, we have a discussion about whether they would or would not choose to participate in HAFA.  If they choose to participate in HAFA and not pursue a "regular" short sale, I will NOT be the Realtor listing their property.  I have based this decision upon first-hand and extensive experience with the realities of this program and have chosen not to waste my time or anyone else's with what I believe to be an exercise in futility. 

Permalink Reply by ElizabethWeintraub00697006LyonRE on November 6, 2011 at 5:09am

Yes, I have heard of it. However, I have no idea why any person would ever in their right mind hand over a deed-in-lieu to the bank because it helps the bank more than it helps the homeowner. A DIL looks awful on your credit report. It's almost as bad as a foreclosure. Why would anybody want to help out their bank? They should do a short sale and help themselves.