What is the max amount that Fannie Mae will pay to subordinate lien holders?

I have a short sale going with Chase as the 1st lien holder, SLS as the 2nd lien holder and an attorney who is representing Discover card as the 3rd lien holder.  I am working on this as a HAFA short sale and am wondering what the total is that I can get to pay both the 2nd and 3rd lien holders.  I was under the impression that I would be splitting a total of $6000 between the 2nd & 3rd lien holder.  SLS is telling me that the total is $8500.  I was under the impression that the amount had changed in standard HAFA short sales but not with Fannie Mae.  Their total is still $6000.  Am I right or wrong?  Any info will be helpful

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FNMA no longer does HAFA short sales.  This would have to go traditional short sale. FNMA allows a max of $6000 to 2nd lien.  SLS will allow $0 of that to go to the credit card judgment lien.  FNMA WILL NOT allow anyone to contribute to junior liens, not the seller, buyer, or agents. FNMA also requires any 2nd mortgage lien holders to accept the $6,000 AND waive the deficiency balance.  Therefore, the only way this short sale can get approved and closed is if someone settles the credit card debt and receives a release of lien PRIOR to closing.  Plus, SLS will have to approve accepting the $6,000 for release of lien AND full waiver of deficiency.  Our law firm closes 100+ short sales/ month.  We are very aware of FNMA short sale policies and requirements.  

Again, Fannie does do HAFA short sales.  At the end of last year they tweaked the program.  It is now HAFA II https://www.fanniemae.com/content/job_aid/loanworkoutfactsheet.pdf

There seems to be a lot of misinformation on this thread.  HAFA II is offered by Fannie MAA - HAFA did not end.  They retweaked it.

BUT to answer the question $6000 is the max TOTAL to all and any second lien holders.

I've had instances where the 3rd lien holder receives monies but there is a cap to the Total amount.  It's usually 8% or $8500.  I just had one where the Jr. lien would NOT accept MORE than what the first lien gave them ($6,000) because of the Dept of Justice settlement.  Go figure and Yay???? 

Also, while there is a lien (credit card, etc), you may want to ask your title company if they can homestead the lien.  It won't take it away from the seller but may allow closing for pursuit later. 

As others have said, $6,000 is the max; however, I have had Fannie Mae pay more than by obtaining an exception.

How recently have you obtained an exception?

Can you please let me know asap how you were able to obtain an exception?  Fannie Mae is only offering $6,000 but the 2nd lien is DEMANDING $10,000.  Please help!!!!

The seller or agents are willing to pay the $4,000 difference.  How can I get Fannie to allow???

Kacey,

      Typically, no contributions can show on the HUD with FNMA. I'd escalate with SLS and provide them proof of FNMA as the investor and that per guidelines they will only be allowed $6,000. I'd also check to see if FNMA will even contribute money to a credit card lien, I am inclined to think they won't. Sounds like people may need to step into the grey area to potentially get this transaction done.

[email protected]

www.ishortsalenow.com

310-564-6389

May not be as easy as it would appear. Please see  the Q&A below form the Fannie Mae Homepath/Short Sale website.

Q. Can the buyer contribute additional funds to pay off a subordinate lien holder, if the lien holder requires more than $6000 in order to approve the short sale?

A. If the subordinate lien holder is accepting any portion of the $6000 in exchange for a release of its lien, it must not require or accept additional funds from the seller, real estate agent(s0, buyer, or other party to the short sale transaction. When funds are offered from the short sale proceeds to satisfy a subordinate lien, the intent is to obtain a complete settlement of the lien using those funds alone.

I think they said or implied on the webinar that you can escalate to Fannie and they will assist in negotiations with subordinate(s).  I may have heard that wrong though.  I'm looking to get it clarified.

Not according to Fannie. I was just on the CAR webinar today.  They made it very clear it's $6000 total from them and no other party can add to that even though their Guidelines would seem to allow the Buyer to bring funds if Fannie doesn't offer any funds.

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