FHA Short Sale, BOA is servicer. After 90 days of going around in circles, BOA tells us the loan is NOT FHA - even though the recorded Deed of Trust clearly marks each page as FHA, even though we have a FHA Case #, etc. This has even stumped the escalators at BOA, who have decided we should process the request like a Conventional Loan via Equator. Has anyone run into this before? Any suggestions?
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Have you contacted HUD to verify what Bank of America is telling you?
Yes, we are working on this.
In September, the FHA will begin its Distressed Asset Stabilization Program, which puts up thousands more loan notes for sale. Since 2010, the agency has sold off roughly 2,100 notes. By the fall, they plan to hand off around 5,000 a quarter. Private investors can then buy these pools, on the condition that they’ll walk the owners through a remodification or short-sale. And homeowners, who are more than six months delinquent and have begun the foreclosure process, will suddenly find another option
http://www.forbes.com/sites/markbergen/2012/06/12/fha-turns-once-mo...
This is great info - but they will continue to process a FHA short per FHA PFS/SS Guidelines, correct?
Not to my knowledge as it would no longer be an FHA Loan.
When is a case termination processed?
An FHA case is automatically terminated in HUD's system when the mortgage reaches maturity. However, the lender may terminate the case beforehand under various termination types:
Prepayment (Term Type 11): Borrower paid the mortgage in full before the maturity date. |
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Non-conveyance Foreclosure (Term Type 13): The property was acquired by a lender or third party at a foreclosure sale or was redeemed after foreclosure and no insurance claim will be submitted to HUD. |
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Voluntary Termination (Term Type 21): Both the lender and borrower agreed to voluntarily terminate FHA insurance.
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Loan in question was a Re-fi 2008. Does the amount of the loan matter?
It shouldn't.
One nice thing about FHA mortgage insurance is that it's not permanent. FHA mortgage insurance eventually goes away.
The schedule for getting rid of FHA mortgage insurance changes by loan term.
In other words, if you have a 30-year fixed rate FHA mortgage, you must pay mortgage insurance for at least five years before it can go away regardless of your loan balance or LTV. By comparison, if you have a 15-year fixed-rate FHA mortgage, your mortgage insurance is removed as soon as your LTV is low enough.
Also, note that the FHA does not allow a new appraisal to determine whether your loan is at 78% loan-to-value. The 78% LTV is based on the lesser of your purchase price, or its original appraised value. In this way, FHA MIP is removed automatically with no action from the homeowner.
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