Unusual situation: home owned by husband and wife for many years. Refinanced in 2009 with FHA loan via BOA. BOA failed to get wife on note. Owners moved out in 2011 and rented home out. Husband died in 2013; probate has cleared and closed. Tenants moved out in July of this year and left property in poor condition, requiring thousands of dollars to restore. Home is well underwater. Wife/widow reaches out to BOA who acknowledges she is not on note and suggests a short sale. Contract is obtained and submitted to BOA, who kicks it back stating that HUD requires loan modification process to be completed first. We reply that dead men have no income, and no tax return since 2014 and submit death certificate, will and last filed tax return. BOA says HUD will not accept. Called HUD and they state that there is no exception to the rule: must do loan modification first and the borrower must request same. Widow is a person of high moral character and is upset that the home will sit and rot for a year, causing eyesore for former neighbors. Her attorney (who does short sales on a regular basis) is at a loss with this one and so am I. Does anyone have a higher contact person at HUD to see if this can be moved forward due to death of the borrower and into short sale or even DIL? Thanks in advance!

Views: 179

Replies to This Discussion

I'd consider apply for the modification with the executors income to see what they say.

Also, did you open up a case with HUD or simply call their servicer?

Best of luck!

[email protected]

310-564-6389

www.ishortsalenow.com

Thank you Brett:

The short sale attorney opened with BOA via Equator, and BOA kicked it back saying that HUD will not accept the docs, at which point the attorney and I each called HUD and were all told the same thing: no loan modification process/no short sale. They also said they will not allow the widow/executor/owner to request the loan modification since the actual borrower has to request it (the dead guy). The attorney is advising against the widow providing her financials since she's not on the note. Her income is low anyway: she's elderly and only receives his social security, but she does own the home they moved into back in 2011 so I don't want anything to jeopardize that. 

I'll see if they can open up a case with HUD but based on what we were told in 2 separate conversations with their servicer, they would not allow this to progress further. 

Hi Kim,

I have a contact,but in all honesty, it may well be too archaic.  You can give it a try though.

[email protected]  - at the time I wrote this in my notebook, he was the HUD national director.  I doubt it is still good, but you never know.

Thank you Cami, it's worth a shot!

Sounds strange Kim, I'd presume there needs to be a solution for these types of scenarios to allow a short sale to go through. I've been involved in many "non-borrower" short sales, but haven't ran into one with a HUD backed note.

If this was being reviewed for a modification, it wouldn't be in equator.

The short sale attorney opened it with BOA via Equator, and BOA kicked it back out stating that HUD required a loan modification be done first.

So when HUD was contacted about a loan modification, they said that the borrower has to request the loan mod. Since dead men can't apply for mortgages (at least, not since sub-prime crashed in 2008), the loan mod cannot be done. And since the loan mod cannot be done, HUD says they will not consider a short sale or a DIL, since they require a loan mod to precede either of these options. 

Big vicious clusterfudge. 

Who contacted HUD?

Who told you that the executor can't apply for a modification review to fulfill that part of the review?

RSS

Members

© 2024   Created by Brett Goldsmith.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************