Replies to This Discussion

Permalink Reply by Michelle Adams on October 27, 2012 at 3:28pm

Not Jillian Mochaels, the law offices of jill Michaels and it was attorney Michelle Adams on the radio this morning. I wrote about this guideline last week. Fannie and Freddie will only pay $6,000 to second lenders for lien release and forgiveness of debt. It is my opinion that this requirement is going to kill a lot of short sales where the 2nd loan is owed more than $80,000 or when the second is held by M&t, BB&T, PNC, USAA and most of the credit union. The third party who listene to the show seems to have misinterpreted what I said as I did not say that homeowners will be left holding the deficiencies. I said that these 2nd lien holders are going to decline the short sale entirely. I already have one. Fannie Mae is the investor on the first and M&T 2nd loan of $100,000 and M&t declined to review it and it is not even November 1st. Not good.

Permalink Reply by Kevin - Greenville, SC on November 20, 2012 at 3:28pm

Michelle,  Do know if this broadcast is available for download?

Permalink Reply by Michelle Adams on November 20, 2012 at 3:32pm

I am trying to get a copy from Sirius radio. Channel 128.

Permalink Reply by Wendy Smith on November 9, 2012 at 3:42am

BAC refused to issue final HUD approval because the junior will not waive deficiency.  We were scheduled to close Oct 30 & the short sale approval letter dated 9/11/2012 makes no mention of a waiver from the 2nd being a contingency of the approval.  Moreover, BAC has known since June 2012 that the 2nd would not waive as they required a copy of the approval letter from the second.  

Had BAC included the requirement in their short sale approval, the buyer would have withdrawn the offer and not spent $$ on the home inspection & appraisal; the seller would not have vacated the property...again - BAC did not require a waiver until the 11th hour - when we requested final hud approval.

The Social Media team (Twitter) escalated but BAC would not make an exception - mind you, this file was so badly bungled by BAC, it was no longer handled by mere negotiators - management including Stephanie Lowe's direct team handled this file - nobody ever mentioned this requirement of a waiver from the 2nd.  Now, that same Nobody is taking responsibility or admitting they screwed up or even trying to resolve the problem.  Pretty much just an oopsie.

FNMA on the other hand says they are not enforcers.  Servicers are supposed to follow the guidelines set forth in the servicing agreements but when they do not, uh, too bad.  

Key Bank, the 2nd, rejected $6000 for a waiver opting instead to receive $0 and pursue a deficiency judgment.  Hmmm, the borrower can file BK and surrender the property and Key Bank gets the same $0 and the debt is discharged.

And all this BEFORE the newest directive.  We shall see much much more of this, another word for our vocabulary:  FORCED FORECLOSURE. 

Permalink Reply by joe beauchamp on November 9, 2012 at 6:14am

It seems that the only hope would be to involve a politician - someone recently mentioned the good work of a state senator. I think you should try one. Point out that: 1) your absolute approval from BofA is clear, listed facts and you complied; 2) BofA took it upon themselves to violate the approval and change investor rules prior to them being instituted. A lawmaker should go red with something like that - they love laws, right? You don't arrest people for going 35 in a 35 zone because next month it will be a 25 zone..

Permalink Reply by Kevin - Greenville, SC on November 9, 2012 at 8:12am

I would seriously consider advising the Homeowner and possible the Purchaser to seek out an Attorney. Not to mention contacting the Media and reaching out to their elected Representatives.

Permalink Reply by Kevin - Greenville, SC on November 9, 2012 at 8:19am

You may want to consider contacting the FHFA if you haven't already.

Permalink Reply by Bryan Crabtree on January 20, 2013 at 2:36am

It's time to start getting the buyers to pay some of these fees to get these closed.  I've had cases where BofA would not approve the hud unless the second lien released, but they allowed all the parties to contribute to it.  It made no sense, but it worked.  If they'll only pay $6k to the second lien, there is nothing preventing the buyer from bringing $6k more if they really want the house, so long as it's above-board on the HUD.  Our market (Charleston, SC) is improving and running low on inventory, so $6k is a small premium for most buyers to get a great deal, or at least a well priced house. 

Permalink Reply by Brenda Swigert on January 20, 2013 at 12:06pm

Yes just had a deal go down last week because of this.