Happy Sunday Everyone!  I have a short sale going with US Bank and I am unsure of what to do.  They are willing to accept our offer, however, they want to hold the owner responsible for the deficiency balance and obviously, this is not in my clients best interests.  When we began the process, they wanted my client to apply for a loan modification and they stopped processing the short sale.  They said if she didn't apply for a loan mod, she wouldn't be released of the deficiency balance, so we played their game.  They applied were unable to make their trial payments.

 

I would like for my client to complete the HAFA paperwork and attempt to be fully released.  Is this a moot point?  The negotiator called me last week and wanted me to send a letter stating that my client waived their HAFA rights, which I am not willing to do and I believe she wants us to do this to screw with my client.

 

Any thoughts, recommendations, or first hand experience?  I would appreciate any guidance whatsoever!

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Replies to This Discussion

I'd send them through HAFA if I were you. Since they were unable to make their trial payments in HAMP, they should qualify for HAFA as long as their payments exceed 31% of their gross monthly income.
if your clients are eligible for HAFA, stand your ground - put it through HAFA.
They will say whatever they are told too. If eligible for HAFA and go through all that with them- then do it. My latest clients were released with negotiating and were not in HAFA. They would have let it go and in MN they would not still be pursuable after foreclosure- so with ready, willing and able buyers, state rules and the fact that they would not sign- we got a new US Bank letter and full release/satisfaction!
I'm not a HAFA fan at all, but in this case, if I were you I would DEFINITELY have them enroll in HAFA. Just make sure there is no second note.

The befefits will be the release of deficiency and the full 6% commission so long as there is no second note. In this case I would absolutely make sure they sign up for HAFA.
Good luck
Kathleen:


I'm in MN also.

Did your clients have a second or only the primary? The problem we're having with USBank is on the second note (with have both the primary and secondary notes with them). HAFA doesn't seem to help us here.
Cindy I had a similar situation w/ US Bank. I've submitted the entire short sale package and the lender told us after receiving the package the owner will be responsible for the deficiency and the only way to avoid it is to submit it through HAFA... We went through the HAFA process, file wasn't moving at all so I escalated the file and called someone higher than the negotiator, that same day we were told the seller was approved for the loan mod which it had to be impossible due to the fact owner owed about $320,000 on the house and his disability income was about $2,400 per month... HOA, Taxes and Ins per month was about $698 and US Bank offered my client a payment of $717. so using the 31% rule this was completely impossible, so think about,how much was going to be applied to the principal and interest, about $20???... It did not matter how many people I spoke to, they kept saying there is nothing I could do... Seller accepted their offer and we lost two great buyers.... I told my client to call me as soon as he gets the loan mod terms, trial period etc in writting, after two and a half months of calling the lender expecting a great news, the seller received a letter saying he was declined due to high debts...

WHAT A WASTE OF TIME, since he was declined for the HAMP can we move forward and get the HAFA approved... ACCORDING TO THEIR GUIDELINES, If the homeowner was DECLINED for the Modification, HE WON'T QUALIFY FOR HAFA.... So now Mr. Seller is responsible for the deficiency?? ... It's been 10 months of nothing but nonsense. I have closed 100+ short sales including few HAFA, this is the first deal w/ US Bank.

We just got a new offer today I will put it through HAFA and print the elegibility which SHOULD be followed by every lender that have decided to participate in the program. Let's see what will happen, at this point there is a Foreclosure sales date set for Jan 2011...


Gilda Ignacio PA, CDPE, REO said:
Cindy I had a similar situation w/ US Bank. I've submitted the entire short sale package and the lender told us after receiving the package the owner will be responsible for the deficiency and the only way to avoid it is to submit it through HAFA... We went through the HAFA process, file wasn't moving at all so I escalated the file and called someone higher than the negotiator, that same day we were told the seller was approved for the loan mod which it had to be impossible due to the fact owner owed about $320,000 on the house and his disability income was about $2,400 per month... HOA, Taxes and Ins per month was about $698 and US Bank offered my client a payment of $717. so using the 31% rule this was completely impossible, so think about,how much was going to be applied to the principal and interest, about $20???... It did not matter how many people I spoke to, they kept saying there is nothing I could do... Seller accepted their offer and we lost two great buyers.... I told my client to call me as soon as he gets the loan mod terms, trial period etc in writting, after two and a half months of calling the lender expecting a great news, the seller received a letter saying he was declined due to high debts...

WHAT A WASTE OF TIME, since he was declined for the HAMP can we move forward and get the HAFA approved... ACCORDING TO THEIR GUIDELINES, If the homeowner was DECLINED for the Modification, HE WON'T QUALIFY FOR HAFA.... So now Mr. Seller is responsible for the deficiency?? ... It's been 10 months of nothing but nonsense. I have closed 100+ short sales including few HAFA, this is the first deal w/ US Bank.

We just got a new offer today I will put it through HAFA and print the elegibility which SHOULD be followed by every lender that have decided to participate in the program. Let's see what will happen, at this point there is a Foreclosure sales date set for Jan 2011...

I have a HAFA short sale approved by Wells Fargo, after one year and losing six potential buyers, but the mortgage was assigned to US Bank so they are foreclosing. I cannot find HAFA Guidelines anywhere, just bits and pieces.WF wrote email to me telling me  all lien holders must waive deficiency rights and no promissory notes are allowed with this program. That no one can make a contributions towards any liens- not the Buyer or Seller or Realtor. I have the 2nd mort. holders approval- they will take $6,000. The HOA, the 3rd lien holder refuses to take $2,000. This could force me into foreclosure..which is what they want. I found out the reason why they will not accept the $2,000 is-one or more of the Officers and Board want to force it into foreclosure so they can buy my beautiful condo on the Gulf of Mexico that has more than $100,000 in renovations in it...at auction at a much reduced price. This is a blatant conflict of interest. They have made an irresponsible decision that will adversely affect all the Homeowners. Their budget is already compromised with little or no reserves. Every day I live here, another $22 plus interest accumulates that they will never recover. FL enacted a new law on 7/21/10. the SB 1196 which states the HOA cannot get more than 1% of the original mort. bal. which in my case their max. will be $3,359  or 12 months fees, whichever is less. I have consulted with  an Atty who is encouraging me  to sue the Officers and Board of the Assoc and all of them personally. Does any know of any other recourse I might have? I was just trying to do the right thing and get  this short sale closed rather than defend the foreclosure and drag it out. Serious fraud and deficiencies, plus the robo signers have been found in my foreclosure process that would allow motions to be filed to delay the process. I was waiting to file for bankruptcy until after the short sale closed, but now I will certainly do this prior to the sale date which will  delay the process even longer. I just wanted to get this short sale closed and move on..but now they are forcing me to do otherwise... Looking for any advice...! Or recourse? [email protected]

Was it a HAMP trial modification? Then they should be going forward under HAFA automatically unless your client doesn't qualify at all for the MHA programs. Is the loan a FHA loan or FHA refinanced loan? Or have they implied MHA but in reality only processed the file under their traditional modification rules? They are not very big on advertising or offering the HAMP and/or HAFA programs.

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