Is Title Co. or Bank to blame??
I am a seller who just went through a lengthy short sale with BOA. My realtor had completed all sales paperwork ensuring that I would receive the $3,000 HAFA funds when we listed the home, but at the closing table the funds were mysteriously missing. The title company had no explanation at the time, and has continuously changed stories from "they didn't have time to qualify me", to "It was the bank's responsibility to qualify me, and they did not." The bank had stalled for months after approving the sale, so the house was actually set to go to auction only 1 week after the date of closing, so I was forced to sign the papers.
It is very frustrating to have been assured of the HAFA funds, and then be denied these funds without any notice. My realtor is doing some legwork, and reports that what he is hearing the more likely reasoning is that I was actually not eligible for HAFA funds because my home was in active foreclosure. Does anyone here know if that is a legit reason, or do I need to pursue this further with the title company?
Thanks for your time, and any help!
Replies to This Discussion
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Permalink Reply by Beverly Cibulsky on -
Did you acually recieve and sign "the offer to particiate? " or any other verifcation sent to you that you can/or are to participate in HAFA, was the correct paperwork sent with the offer? (Seller must sign! ) Look though what you siged and provided to the servicer BOA.
I would never assure a Seller/Borrower that they will get HAFA incentive, only that they may qualify for it! Your approval letter should have stated this! ( and that is the closest to assurance you can get!) After all is said and done, look at your approval letter!
If you are out of your loan, and defficiency waived, and an owner occupant who can still utilize the Forgiveness of Debt Act, You probably did well! I do need to reccomend however, that you need to seek competant legal advise for your answer to your inquiry. Tile Co, only closes on the terms of the sales contract and approval letter. Just curious detail? Who facilitated your short sale? Your agent or the title company?
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Permalink Reply by David on
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My agent set up the short sale, and there were several documented discussions between he and the title agent before closing, in which the title agent assured him that I was qualified for the HAFA funds. BOA approved our deal, and then came back several times to re-nogotiate, which made the entire closing process very lengthy/confusing. To be honest, I do not recall if I ever signed a particular "offer to participate" document, there were way too many papers! I do remember the $3,000 incentive being on a line at some point, but can't even remember at what point that was in the process.
I do also have an attorney that is working with me on debt management. His advice is to demand the $3k from the title company, or tell them I will be filing a claim against their errors and omissions insurance. This is simply on the strength of the documented conversations from my listing agent, and their agent.
Thank you for your advice, and I will look into the "offer to participate" letter. Is it still possible then, to qualify for HAFA incentive if your home is in active foreclosure?
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Permalink Reply by Bryant Tutas on
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The HAFA incentive would be specifically mentioned in your short sale approval letter from BofA. If it's not then you were not approved for HAFA. That's the first place you need to check.
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David, there is no way to determine if your loan qualifies for HAFA(treasury-non FNMA, Freddie) when you list your home, before the short sale is actually initiated with the bank. Bank of America probably does not "own" your loan. They have thousands of investors who actually own the loan, and it depends on whether or not the particular invfestor that owns your loan participates in HAFA, or not. The determination for HAFA eligibility should have been the first step. It sounds like the title company never ask for a HAFA determination. Bank of America may, or may not, have automatically checked for HAFA participation by the investor.
This is why the "Sue Your Realtor.com" domain name is already taken. We need to do our jobs right, and this site is a great resource for trying to do that.
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Permalink Reply by Smitty on
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Bryant is right. Read your approval letter. It will stipulate if you were approved for the relocation expense. The listing agent can't qualify you for HAFA. Only the servicer qualifies you for HAFA. If in your approval letter you were granted the $3000 in moving expenses then you were approved for that fee.
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One thing that may have happened is the HUD that was submitted to BofA failed to include the HAFA incentive. When the preliminary HUD is drawn up by escrow or title, depending on your state, they will include your HAFA incentive as a line item and reduce the net to the bank. If this was left off, that could be why it was not included in the closing funds. I would ask your realtor to have them send you the prelim HUD that was sent to the bank and see if it was included. Hope this helps!
Heather Gennette
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No listing agent should ever tell you that you will be qualified for HAFA as they have no idea if you are or not. Servicer qualifies not the agent.
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I work for a title company and I also do short sales in Bank of America Equator System. If you were not approved for HAFA the title company has nothing to do with that. When the realtor initiated the short sale in EQ they are asked if the property is your primary residence and if answered "yes" BOA automatically reviews the file for HAFA. It could be that you were so close to auction that you didn't qualify for the HAFA program. You should call BOA at 866-880-1232 and they will tell you the reason you didn't qualify for HAFA.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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This issue has nothing to do with the Title Company period. I expect your agent was negotiating this transaction with BofA and would have become aware during the process if you were HAFA approved or not. Also, as others have said, it would have been CLEARLY indicated on the Short Sale Approval Letter you should have received either from BofA directly - if they had the correct address for you - or from your Agent when they received it from BofA ---- prior to closing.
I also agree with others that your agent would not have known at the time of listing your home as to whether it would be HAFA eligible or not - BUT - he/she would have known as they got into the discussions with BofA. If they used a 3rd Party Negotiator to handle it for them, that person should have understood once they were in discussions with BofA.
You need to go back to your agent and have that discussion.
Good luck!
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Permalink Reply by Mike Rizzo on
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It is actually extremely rare when the title company screws up and doesn't include something on the HUD like the HAFA incentive. They prepare the HUD based on instructions which can be in the form of the contract, approval letter, etc. They always need something in writing saying what they are supposed to include. If they missed putting it on the HUD, then they are probably on the hook, but so is your agent. They are representing you and should have reviewed the HUD that BOA approved. The title company or the real estate agent do not qualify anyone for HAFA participation. This comes from the BOA in your case. I had a short sale recently where the seller signed and accepted the offer to participate only to have Freddie Mac (investor) refuse to give any of the incentive. They felt they were not getting enough so in order to increase the proceeds, they eliminated the incentive. Getting the incentive is NEVER a given even if you are approved to participate. It always says on the approved to participate letter that you will receive up to $3000. Up to can be $3000 or it can be nothing. That being said, if it said it on your approval letter...then you should be entitled to the money. Hope this helps.
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Permalink Reply by Patrick Willard on
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I've seen many times that a title company made a mistake on the HUD. I always insist on reviewing the HUD regardless of the type of sale. I've done REO for years and always asked to review HUD before submitting to seller. One time title didn't send me the HUD and they missed a $2500 payment to a neighbor for a well share agreement. Seller's attorney and title both claimed it was my fault and I should pay but I sent seller two faxes (this was 10 years ago) I sent title asking to fax me HUD for review and told seller title and attorney reviewed but I didn't and said they should ask them to show proof they sent me HUd to review. Paralegal got fired, title company lost account.
Bottom line even if you should have gotten $3000 and if title missed it ultimately your agent should have checked that HUD was right.
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Permalink Reply by John E Bonnett on
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Your case is easy to solve. If your listing agent did his/her work correctly and you did qualify for HAFA, then BofA would send you a Short Sale Agreement (SSA) stating what you must sell the house for, the fact that would receive $3,000 at closing and it must be sold within 120 days or, possibly, go DIL. If you weren't provided an SSA to sign and return, then you have no case - somebody misinformed you that you qualified for HAFA. Additionally, the preliminary HUD-1 should have shown a $3,000 payout (HAFA) to you. If you can't produce those two documents, I think someone failed you and you do NOT have a case.
Good luck.
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