GreentTree Accepted HAFA - Approval Received in 5 Weeks - The strangest short sale ever!

Hello All,
(Post is a little long but worth reading)

I just received approval for a second loan with GreenTree (GT) and it was a HAFA short sale (my first HAFA!), but this was the strangest short sale I have ever worked on.

Here is the outline of the deal and I am going to apply this strategy when I do my next short sale with GT.

The scenario:

First was with another major lender for $453,000.

Second was with GT for $83,000

Offer accepted by the first: Purchase price was $298,000 (yes we are tanked out here in Phoenix, AZ)

Both loans were purchase money (Second was not a HELOC used as purchase money)

As usual, I faxed over the package to both lenders at the same time and called them 3 days later to confirm package receipt.

The first suggested HAFA (which I am confident works best when the second is NOT a line of credit - HELOC) and so we agreed to pursue HAFA.

GT called about one week after I faxed the package and told me they needed 5% of the purchase price ($14,900) to proceed (just like I see most agents in this forum stating). I told the rep that I would do everything in my power to get them their 5% but had to wait until we received approval from the first.

It took about 5 weeks for the first to send us an approval letter and I faxed it over to GT to show them we had acceptance from the first.

Now my strategy for dealing with second loans is:

I typically have good success getting second lenders to accept about 5% to 10% of their loan balance, in this case $4,150 to $8,300 even though GT told me they wanted 5% of purchase price or around $14,900.

Now here is where this deal got strange.

They waited for me to send them the approval letter from the first lender before they opened the file!

Meaning they had not done any file setup, BPOs, etc, even though they had my full package for over 5 weeks now!

The rep told me they needed about 4 weeks to respond to the offer!

I was floored, mad and a little scared for my client.

Luckily I had asked the first lender for a 45 day closing period!

I contacted the first and told them what was happening and that a closing delay would not be caused by the seller or buyer but by the second lender. They told me that this was not a problem and I decided to give them at least a weekly update as I went through this fiasco with GT.

After reading the horror stories on this forum about GT, I decided to submit a HUD to GT for the full amount the first gave us about $4,900 plus the $3000 HAFA allowance the seller was to receive, giving GT a net of almost $8,000. (I had told my sellers right out of the gate that the second was going to probably need about $8,000 to agree to do the short sale so they were not expecting the HAFA money anyways).

In about one week, the BPO agant called me for access to the home (I ALWAYS remove access instructions from the MLS so the BPO agent or appraiser has to call me and I can quickly fill them in as to where we are at.) and I gave him a quick outline of the deal.

I decided to call GT about every 3 days to see how the file was progressing.

 

End of week #1, the rep told me they were waiting for the BPO to come back.

I actually had to go out of town for a training seminar during week #2 so I did not call them.

At the start of week #3 I called them to see how things were going. The rep put me on hold to check the file.

He came back and said that the BPO was completed, but was sitting in a black hole somewhere (for 3 days now) and had not been forwarded to the BPO review people!

I was shocked at the lack of organization this company has when it comes to processing a short sale! I now decided to call every 2 days to make sure they were doing something!

Week #4, the rep told me that the BPO review was complete and that the file was sent to upper management for sign off, then it would be forwarded to the investor for final approval.

Start of week #5 - rep called me and said he had an approval BUT, there were 2 of them??

1. - GT nets $2,000 but can chase a deficiency - totally against HAFA!
2. - GT nets $10,000 and will not chase a deficiency.

By the way, I had to choose right then which approval amount my client would accept! I chose the $10,000 "option".

Approval Letter came the next morning and we are now rushing like idiots to close as they only gave us 3 weeks, even though they took their sweet time to process the file!

For anybody else doing a short sale with GT as the second lender:

I highly advise you tell the first lender you may need about 60 days to close because of the policies that GT has and the fact that they will not open the file until you have an approval letter from the first lender and then they need 30 days, or more, to send an approval.

Call GT every 2 days, be polite of course, but keep on them, make sure they are doing something and that your BPO is not sitting in some dark hole with Capt. Kirk, Spock and the Klingons!

Offer up as much $ as you can on the first HUD to GT, and know that they will accept less than 5% of the purchase price even though they tell you otherwise!

Strap yourself in as you are going to take a wild ride!

Good luck!

- Mark Stafford

Views: 1188

Replies to This Discussion

job well done.....this is a GREAT post.....

Can you tell me how you got around the HAFA $6,000 cap for the junior lien holder.  I thought the second had to agree to settle for what's allowed under HAFA for the second.  Are you saying that they can get more as long as it does not come from the first? 

Hi Ute, the $3000 to the seller from HAFA was given to the second as well as the buyer kicked in $1000 and I kicked in $1000 to get the second what they wanted to release the lien.

(I told my sellers they were probably going to have to contribute to get enough money to the second). Luckily that came in the form of the $3000 from HAFA.

 

As far as I know, the second can receive more funds over and above what the first will contribute.

 

Green Tree offered us 2 different "choices" for an approval. One was for $2000 and they could chase the deficiency, which would of course not fly with the HAFA guidelines, and $10,000 with no deficiency.

 

Now that I think about it, GT really does not follow HAFA, or at least with this particular deal. The bottom line is, keep hammering on them until you can get a response for what they want, then go find the money.

 

I made some really good videos to help agents get their short sales approved. Go to YouTube and search for markastafford.

 

I hope this helps. -Mark

 

Ute Ferdig said:

Can you tell me how you got around the HAFA $6,000 cap for the junior lien holder.  I thought the second had to agree to settle for what's allowed under HAFA for the second.  Are you saying that they can get more as long as it does not come from the first? 

Mark, did the first approve the new HUD showing $10,000 to Greentree?  Who was the first?  I have a Greentree second for $47,500 and will offer them $6,000.  It's not yet approved by the first (Marix Servicing - never heard of them before), but we are going under HAFA (non-GSE) and are asking for the maximum to go to Greentree.  Greentree is a purchase money second and they get nothing if the house forecloses, but I hear Greentree has a reputation for not caring if they get nothing.

Hi Ute, here is what happened with my deal.


Did the first approve the new HUD showing $10,000 to Greentree? Yes the first had no problem approving the $10k, First was Wells Fargo. Wells gave $4,800, Seller gave $4,000 including $3000 gift from HAFA, I gave the remaining $1,200 to get to $10,000. This GT loan was a HELOC and they did not chase deficiency and stated that in the approval letter

I have a Greentree second for $47,500 and will offer them $6,000. I ALWAYS ask for the max. Under HAFA I believe the first is only allowed to give the second 6% of purchase price maximum.

 

Marix Servicing - never heard of them before - Me either but I am sure as long as your offer is at or close to market value they will approve the deal.

 

Greentree is a purchase money second and they get nothing if the house forecloses but I hear Greentree has a reputation for not caring if they get nothing. - I don't believe that statement at all but, You will have to call GT much more than the normal lender as I believe they are NOT very organized with their short sale procedures. My completed BPO sat at GT for 4 days before they "gave" it to the negotiator - which blew my mind.

 

NOTE:

GT did not even order the BPO until I sent them the approval letter from the first, so we had to wait about 6 weeks to get approval from them. You need to keep this in mind and make sure you tell the first about their lax abilities and ask for a 60 day close minimum.

 

I noted that my negotiator had sort of a bad attitude so I would always talk to him in a very positive and upbeat tone which in turn, I think, got him to kick butt on my file and get it done as fast as he could, for what its worth.

 

Let me know how you make out and contact me anytime if you have questions or are having problems :)

 

-Mark

 

Thanks Mark for providing more detail.  I'll keep calling Greentree and will let Marix know about the time requirements because of the second not starting the process until we have approval from the first.  Thanks for all the info. 

 

By the way, do you have any contacts for Freddie Mac.  Have one going to foreclosure on Monday and they denied request for postponement in the middle of the short sale process.  Trying to undo the damage and can't seem to be able to get to a decision maker at Freddie Mac.  Desperate at this time.

Hi Ute, I am sorry but I don't have any connections at Freddie. Actually, and not to scare you, the hardest short sales I have ever dealt with are for Freddie & Fannie.

 

I would keep asking really nicely to the negotiator to stall the sale if your offer is close to market value. If your seller waited until the 11th hour to have you list their home, it is harder to get a postponement.

 

The last failure I had about 4 months ago was a Fannie home where the appraisal came in $10,000 low on a $60,000 condo. We all know that an FHA appraisal sticks with the home for 6 months. Home foreclosed in Nov. 2010 and they have not placed it on the market yet. I guess this is a new strategy they are trying to get the appraisal to drop off?

 

I will laugh and call the white house if they sell cheaper than my short sale offer.

 

Good luck! - Mark

 

Great info. and my non-HAFA deal was approved accepting less. I escalated to Management.

I've got a Green Tree second and Ocwen has approved the first with a Sept 22 close.  GT already gave us a negotiator who was easy to get hold of until we got an approval from the first.  Now she is AWOL not returning messages and voice mail full's.

 

Any tips for us out in the hinterlands?  I'm in Calif. and have done many short sales.  First with GT and my antenna is already up big time.

 

What management?



Louise Dela Cruz said:

Great info. and my non-HAFA deal was approved accepting less. I escalated to Management.

I have a 2nd with GT and 1st with BOA, I figure we are in trouble on GT - they made it clear to me they are NOT HAFA participants and can get as much as they can....my seller decided to not go with HAFA and is doing a traditional with BOA now....

Interesting as we went all the way to approval with AFS or BofA HAFA; despite the fact that the second issued a letter of approval and all was great ( uploaded the 2nd approval letter to the library), BofA said the 2nd did not participate in HAFA and shut the whole deal down. We have started all over.And by the way, the 2nd originated as BofA purchase money and they sold the 2nd in the middle of the short sale, hmmmmmmm.....

These is a no recourse law in California SB458 ,now so the 1st nor the 2nd can persue as long as it's the primary residence.

Mark Stafford, I had a different experience with green tree and actually had their approval long before the first, go figure?

 

 

Hello Mark. Great read, thank you for sharing. I am really baffled on how you got Wells Fargo to approve HAFA HUD with $10,000 total contribution to Greentree 2nd. Are you sure Wells Fargo did not convert your short sale to a "traditional" short sale versus a HAFA one?

HAFA guidelines will only allow a max of 6% payoff to 2nd lien holders. I didn't know you can offer more from different sources (such as your commission) and even divert the $3,000 HAFA contribution to seller to the 2nd lien. Please clarify because I might have to do this with my Greentree 2nd and I highly doubt BofA HAFA will allow to do this. Thank you.

 

 

 

 

 

 

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