Is $8,500 required to the junior lien holder in a HAFA short sale?

I have an approved HAFA short sale with Wells Fargo on the 1st.  The junior lien holder (Chase) is saying they will not accept anything but $8,500 because it is HAFA with one of the five major banks and if we drop HAFA then they will accept less.  ABSURD!  Wells Fargo says that is not mandated and I am being misinformed but Chase says otherwise.  I am desperate for anyone to tell me where it states this one way or the other so I can prove to the bank that is wrong.  Or any other suggestions?  Also, does anyone know how to escalate to a manager if Chase is wrong?  The negotiator is always the one I end up having to talk to.

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Permalink Reply by Kevin - Greenville, SC on March 27, 2013 at 4:51am

No.  $8500 is the cap.

Permalink Reply by Kevin - Greenville, SC on March 27, 2013 at 4:55am

You can bet that when Chase is servicing the 1st Mortgage they are not giving the entire $8500 to the Jr. Lienholder.  It's usually a % of the unpaid principal balance.

Permalink Reply by Wayne Brooks on March 27, 2013 at 5:16am

Exactly, Brian and Kevin.

Amy, how much is the second, and what is WF offering?  Advise the negotiator at Chase it's not an automatic $8,500, it's a % (usually 6-8) of UPB, up to $8500, as they could verify from their own, 1st mtg short sale dept.

Permalink Reply by Amy Owens on March 27, 2013 at 5:22am

Wells Fargo (1st) is about $185k and Chase (2nd) is about $43k.  Negotiator at Chase said if I cancel the HAFA short sale with Wells they will accept 8% but why would we need to cancel HAFA for that to happen.  Doesn't seem right.  Wells approved $3k but are now willing to go to $6k but Chase said we would still need to cancel HAFA in order to accept less than $8,500.  I am going to try and figure out how to escalate this with Chase but I'm not feeling good about it.

Permalink Reply by Amy Owens on March 27, 2013 at 7:13am

I spoke to Chase Supervisor today and he stated that CHASE will ONLY accept $8,500 if it is HAFA approved through one of the five major banks.  He too encouraged the seller to opt out of using their HAFA benefit.  Seems illegal to advise that.  I have started a Case Escalation through HAMP.  We'll see where it goes.

Permalink Reply by Amanda Williams on April 2, 2013 at 9:05am

Strangely enough I had a similar situation with BOA as the first and Greentree as the second. I had Greentree tell me they would accept $3100 as settlement and release and BOA said no we have to pay them $8500 due to it being HAFA... Ultimately I had to take it out of HAFA to meet first lien investor net and now I have to work backwards with the second and try and get them to agree to less now.

Permalink Reply by Amy Owens on April 12, 2013 at 8:13am

I FINALLY got the approval for both banks today!  The 2nd lien holder (Chase) accepted 8% of the balance on this HAFA short sale BUT I believe this is not common to happen this way.  I am told that Chase has been encouraging that ALL HAFA short sales WILL be requiring $8,500 if they are the junior lien holder.

Permalink Reply by Kevin - Greenville, SC on April 12, 2013 at 8:36am

Congrats!

Permalink Reply by Amy Owens on April 12, 2013 at 8:58am

Thank you!!!

Permalink Reply by Kevin B Tolbert PA on April 14, 2013 at 12:43am

HAFA reads $8500 or 6% whichever is less.

Chase knows this very well.

The reason they want you to cancel HAFA is so they are not bound by the deficiency waiver.

Stick to your guns.

Keep escalating until you get to an intelligent negotiator that will take the 6% and say Thank you.

Permalink Reply by Ashley Monasmith on April 14, 2013 at 2:27pm

I'm finding this to common lately with Chase in second position. They say they are paying it so they should get paid that. They try and argue the fact that it shouldn't matter to the first anyways because they get to write it off or have the tax break. HAFA guidelines say $8500 or 6% of the unpaid balance. You have to stand your ground. They will try and say they can't submit it to the investor unless it is the full 8500 without management approval. Call all sups, managers, escalation  they will submit.  

Permalink Reply by Amy Owens on April 15, 2013 at 3:50am

Yeah, I fought tooth and nail for this one ... going to supervisors, etc.  I finally complained enough and got the VP of Loss Mitigations on the phone where and he broke down and signed off on the 8%.  He did explain that Chase is going to continue to pursue $8,500 on the five major banks that that are in 1st position (Wells, BofA, etc.).  I also filed a complaint through HAMP website and they were ALL over it.  I will keep fighting for that but preparing the buyer/seller for the $8,500 as a worst case scenario.  It gets exhausting!

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