Replies to This Discussion

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on March 5, 2012 at 7:06am

Angela - Is your property listed ?  Or are you waiting for Wells to do an appraisal before you list it ? 

Yes, in my experience, Wells wil not move forward without the property being listed with a Realtor and being marketed in the local MLS.  Did they request a copy of the MLS printout and MLS History yet ? - If not, they will.

 

Good luck !

Permalink Reply by Angela on March 5, 2012 at 7:19am

Hi Thom! 

I haven't listed my property yet because we were waiting for the FHA appraisal to set the listing price.  I guess my concern is that if we did go ahead and put together a listing agreement, using area comps set the listing and before we make it past loss mitigation department we have an offer at our listing price.  Then the appraisal is done and the FHA/Wells FMV is lower that our listing price.  We would not only lose the buyer but then wouldn't a price increase show in the MLS system.  I am probably over thinking this but after reading many of the discussions I realize I need to follow closely the WF requirements.   If only they were consistent.... 

Permalink Reply by Jim McCormack on March 5, 2012 at 7:26am

Hi Angela.  That is why you don't put the home in the MLS or even show it to buyers until the ATP is issued.  That you will start with a known price.

Permalink Reply by Jeff Payne on March 5, 2012 at 7:30am

I never wait for the lender to tell me when to list it, even with FHA, I submit a full package to them after we get an offer, I have never had one rejected or denied

Permalink Reply by Jim McCormack on March 5, 2012 at 7:38am

The HUD PFS program still requires an appraisal and if your offer does not meet their minimum guidelines (88%, 86% or 84% depending on the time involved), the offer will be rejected unless HUD grants a variance.  Therefore, if you have not had a offer rejected it just means that your offer have met these guidelines.  My preference is determine as much information as possible up front and get into the HUD PFS program before marketing the property.  Also, not being approved into the HUD PFS program right away when it is available to the seller puts the seller at risk for foreclosure unless you get an offer quickly.  I see far too many agents listing FHA short sales and never even attempting to get the sellers into the HUD PFS program and then house is foreclosed and the seller is not released from the deficiency balance.

Permalink Reply by Tammy Davis on March 5, 2012 at 7:31am

Angela,

I understand your concerns about  the banks FMV being lower or higher than the list price, but this is where your agents knowledge of your local market and expertise is put to task.

I can honestly say that I have never had a lender set a value that I could not fight and win. I just had one witth Chase last week where their value was 100k more than our list amount and contract amount. I fought the value with comparable recent sales and photos, as well  as a list of necessary repairs. They approved the short within 48 hours on our list price.

 

Permalink Reply by Jim McCormack on March 5, 2012 at 7:14am

Hi Angela. If you look at the top of page 4 (Use of a Real Estate Broker) on HUD Mortgagee Letter 2008-43 (see http://www.endingforeclosures.com/wp-content/uploads/2010/12/HUD-Mo...), you will find that according to the HUD PFS guidelines that you actually do not need to list the property for sale until 7 days after you are approved into the HUD PFS program via an Approval to Participate (ATP).  However, you have to understand that very few FHA negotiators at Wells Fargo or any other bank will even know or understand this so they are just doing what they were told to do.  You could fight this, but the answer is why.  Just go list the property for sale with a short sale specialist who knows the HUD PFS program.  The list price will be a guesstimate.  Your short sale agent should not put the home into the MLS yet.  They will just submit the Listing Agreement to to the bank to complete your application.  Once the appraisal is done and assuming you are approved into the HUD PFS, your agent will then need to get a Listing Amendment/Addendum signed by you with the price required under the HUD PFS program (i.e. the appraised value).  This method will solve your problem.

One caveat.  If your home is deemed to be in "foreclosure status" (there does not have to be a foreclosure sale scheduled yet), there is a good chance that you will not qualify for the HUD PFS program unless you have a contract from a buyer.

Permalink Reply by Jim Schneider on March 5, 2012 at 7:17am

Angela,

 

Unfortunately, it has been my experience that many of the servicers act as though they get to decide how to handle the FHA PFS program, even though HUD has set up very specific procedures. What seems surprising is that sending them a listing would suggest that you intend to sell the property, and PFS could be used for a loan modification as well. 

That being said, if your intention is to sell (not do a loan modification), I would suggest you contact an agent in your area that is familiar with the FHA short sale process, because you almost have to know which rules the servicer is breaking in order to get them to comply. In looking for an agent, I would ask how many short sales they have done, as well as how many PFS short sales they have completed. If they ask, "what is PFS" ...well you know how much they know about the process.

 

If you would consider a number of options, (loan mod, short sale, deed-in-lieu) then you really should contact HUD's servicing center for PFS. They can be reached at 877 622-8525. It is helpful to have your FHA case number, which can be found on the top of your mortgage at your recorder's office (look for a website, save a trip). Hopefully this helps, and good luck.

 

Permalink Reply by Tammy Davis on March 5, 2012 at 7:18am

Hi Angela,

I can only speak from my experience..I never wait for the lender to tell me (or the seller) what to list the property for. I suggest to the seller that we list the property at a price that is based on recent comparable sales. Then I am armed and ready to fight whatever value that the bank comes up with.

I suggest that you list the property and start the short sale process. Don't wait on the bank...they could come up with an unreasonable value from the beginning that will be very diifficult to fight.

Also...an added note...I also tell my sellers not to contact the lender, leave it to me. When you have too many people calling for a status there may be information that is not promptly relayed. Just make sure you choose an agent that is knowledgeable, diligent and ready to fight the fight.

Good luck ~~

Permalink Reply by Angela on March 5, 2012 at 8:08am

Thank you so much for your many responses!  You have been so helpful with your advice and guidance.