I almost lost a deal a couple of months ago when we hit 84% of the BPO but HUD came back and said, "we need the $9,500 partial claim to be paid in full."  Amazingly, the buyer raised their offer $9,500 to make it happen (on a $110,000 house).

Now I have a similar situation.  The negotiator told me, "Get me to 84% and we are set.  They will waive the partial claim."  He submitted the deal for approval and HUD said, "84% is fine, but we want the $4,500 partial claim paid in full."

Has anyone out there successfully negotiated a deal like this with:

1)  A variance
2)  Paying a reduced amount to release the partial claim
3)  A new seller promissory note
4)  Anything else

Thanks,

Brian

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Replies to This Discussion

Who is the servicer you are dealing with
Wells Fargo

John Edelman said:
Who is the servicer you are dealing with
I do a lot of Wells Fargo FHA short sales - who is your negotiator
Will Johnston
Will is one of the managers in the FHA group and he certainly knows what he is doing.

I just closed an FHA with Wells last week that had a partial claim and I went back and looked at the HUD.

In our case, the net with the amount for the partial claim taken out was still above the 84% mark.

If you have not done it already, I would email Will and ask him about a variance request, or any other ideas that he has to get this one approved.

How close is your net to the 84% number - and can you get the sales price up to where you are getting 84% with the partial claim included.
Brian - if you are interested - you can give me a call off line at 817 690-7909
Brian,

Partial claims (as with other subordinate liens) are a problem, to say it politely.

I have one HUD/PFS short sale with a partial claim and a second mortgage. I think we may be able to get that done.

But, some cases just need to foreclose in order to extinguish the liens.

To answer your question, I have not been able to get an exception from HUD on partial claims. HUD has much more precise guidelines than Fannie/Freddie, and corresponding they are less willing to grant exceptions, in my experience.

(BTW, I like the HUD/PFS program, I have only good experience with it, so far...)


michael
I have requested a variance on 4 occasions and they were allowed.
Partial Claim MUST Be paid in full, if the rep told you different she found out later she was incorrect and they asked for the full payment.
I need help on getting started on a Wells Fargo FHA short sale. I'm being told their process is greatly different than what I've seen in the past so I'm unsure if the rep on the phone knows what their talking about. Please advise me... Thanks, Sheli

John Edelman said:
Will is one of the managers in the FHA group and he certainly knows what he is doing.

I just closed an FHA with Wells last week that had a partial claim and I went back and looked at the HUD.

In our case, the net with the amount for the partial claim taken out was still above the 84% mark.

If you have not done it already, I would email Will and ask him about a variance request, or any other ideas that he has to get this one approved.

How close is your net to the 84% number - and can you get the sales price up to where you are getting 84% with the partial claim included.
What questions do you have?
Trying to figure out their process since it differs greatly from BOA. Do you have a WF fha package? What is their process? I'm getting several different answers from the short sale dept? Thanks, Sheli

John Edelman said:
What questions do you have?
The process is quite striaght forward. As a matter of fact, I just hung up the phine with Wells Fargo FHA group and the phase 1 negotiator on one of my files.

What you will need to send in is:

1. 3rd party authorization
2. hardship letter (signed and dated - not typed)
3. financial worksheet
4. listing agreement (list at the price you feel is appropriate - you may need to change later after appraisal is done)
5. Wells Fargo listing addendum
6. Last 2 pay periods pay stubs for all borrowers
7. Last 2 months bank statements for all borrowers
8. Last 2 years tax returns

You will want to fax it to 866-969-0103

You will want your cover letter to have the loan number on it at the least ( may want loan number on each page)

You will want to specify that you are wanting to get the property into the PFS program.

Then - about 2 days later - you will want to call Wells Fargo at 866-903-1053 and verify that they received the package.

Tell them that you are wanting to get the property into the PFS program and so you need to get the appraisal done. They may tell you that you need to have a contract - but just tell them that you are wanting to get it in the PFS program and a contract is not required.

Make sure that you have them list you as the contact person for the appraisal - so you can discuss the property with the appraiser.

Hope this helps.

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