Owner Occupant Question for a FHA Pre Foreclosure Short Sale
Seller owns 2 properties. Property A without wife and Property B with wife. Wife decides she wants to leave the seller. She moves in to property A until she figures out a new place and files for divorce. Seller can't afford both mortgages now that she is gone. Seller calls me to help him short sale property A (wife isn't on this mortgage but is living in this property). The bank has declined the short sale saying it isn't owner occupied. Bank is stating that the seller who is on the mortgage has to be living in this property in order to proceed with a short sale. Is this correct? Anyone have any advice? He is currently 3 months behind on mortgage.
Replies to This Discussion
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Permalink Reply by Kevin - Greenville, SC on
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Variance is NOT required - PFS and/or DIL - Owner Occupancy
The mortgagor must occupy the property as a principal residence to be eligible for any of the reinstatement options (Special Forbearance, Loan Modification or Partial Claim). Mortgagees are authorized to grant reasonable exceptions to non-occupant mortgagors seeking relief through Preforeclosure Sale (PFS), or Deed-in-Lieu of Foreclosure (DIL) when it is clear that the subject property was not purchased as a rental investment, or used as a rental for more than 18 months. Justification for the above exceptions must be documented in the claim review file.
http://www.hud.gov/offices/hsg/sfh/nsc/faqvarnc.cfm
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sf...
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Permalink Reply by hay.molly on
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I mentioned this to the negotiator today. The seller hasn't used this property has a rental. He tried to find a renter but the renter backed out. At that time his wife moved back into the home. Any suggestions? We provided mail documentation and utility bills.
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Time to escalate.
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Did you get this resolved?
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Permalink Reply by Rachael Babinchak on
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Definitely escalate...I had Everhome following the cut-and-paste FHA guidelines, and I was certain an exception could be made for a condition. Called FHA-National Servicing Center and sure enough, caseworker says"if the negotiator had told me these exceptional circumstances in detail, I would have given a variance". 24 hrs later, variance issued and negotiator had egg on their face.
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