Understanding FHA Waterfall process
I have several short sales that are FHA and it never fails, I have to fight them in the loan modification cue in order to get them removed and sent to the short sale cue. I thought i had the answer when I rec'd a BOA form called a Borrower Election form but that doesn't work for FHA (see attached). I guess my lesson is, if you have an FHA loan, go through the Waterfall process first. Does anyone know a good resource to help me perhaps cut some corners on this or preempt this long process? Thank you!!!
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Permalink Reply by Short Sale Superstars LLC on
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If they are requiring a borrower to go through a loan modification first on a FHA loan prior to a short sale there is no way to circumvent it. I've had discussions with HUD counselors in regards to this in the past. Just double check to see if they were ever fully reviewed for a modification in the past and have a complete modification ready to be pushed through in an expedited fashion.
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Permalink Reply by Adele Guarino-Sanders on
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FYI, they filed bankruptcy and would never consider a modification as that would reinstate the debt they already discharged. Shouldn't that expedite any review for Loan mod?
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Permalink Reply by Kevin - Greenville, SC on
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Permalink Reply by Bryan Firth on
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Adele, I had a FHA short sale recently where my clients had also filed a BK which had been discharged a year earlier. FHA didnt care and said that they now make good money, can afford the property, and should accept the loan modification that they never applied for.. The sellers said, they are not accepting because the debt had already been discharged and they were more than $100,000 underwater.. FHA said, too bad, so sad, they were not accepting the short sale because the sellers now could afford the property.
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