Forum

My clients FHA short sale ATP was denied due to the appraisal coming in higher than the loan balance (173K appraisal vs. 162K balance) and we were told it does not qualify for a FHA short sale as it is not underwater. We do not agree with the appraisal of 173K but it is possible the value may be near the 162K balance. My client has a valid hardship (decline in income) and needs to get out of his mortgage as he now is borrowing to keep up payments (which are current). He has no funds available and cannot continue to go deeper in debt.

Quicken is the servicer.

The sellers attorney who is handling the short sale recommended accepting an offer we had for 157K, as she stated we could not request a variance from HUD for the loan not being underwater without an offer pending. We accepted this offer and moved forward.

The variance was requested due to the fact that even if we could get the appraisal value my client would not have enough proceeds from the sale to close (with closing costs and taxes being in arrears in IL he would still need to bring significant funds to close), so he is "short" even if their appraisal is correct. Should we get the ATP variance, even with the high appraisal my client would be able to give the property to FHA following ATP time frame if we cannot get an acceptable offer (or ask HUD to reconsider the appraisal after ATP).

We have just been told by Quicken that this variance was denied.

Should we follow-up with HUD to insure this came from them?

Any other ideas or advice would be appreciated.