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FNMA will only OK shortsale on primary home?

Posted by Chuck Harmon on September 9, 2010 at 7:58am in Short Sale Discussions
BofA is now telling me that because my client has another home as their primary residence (which they want to keep), they cannot do a short sale on another property (formerly their primary residence 5+ years ago).  It must be either a traditional resale without short sale, or a Deed In Lieu.

Your comments are appreciated

Chuck

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Replies

  • Carol Lain September 15, 2010 at 5:23pm
    I had a BoA short sale earlier this year on an investment property. He owned a few other properties. BoA approved the short sale.
  • Michael Schneider September 13, 2010 at 2:52am
    Chuck,

    I haven't run a loan through the Fannie/HAFA process, yet. I believe that it's being implemented as a back-end program, meaning that you apply for a short sale, then on the back-end it is reviewed for HAFA or "traditional".

    The exception for owner-occupied is relo for employment. Absent that, I would say that your client is probably not HAFA-eligible. But, I think the right approach is to submit the the best, most compelling, file to BofA, the Fannie Servicer, and then follow-up to manage the file and negotiate the best terms for your client.

    Fannie's policy has been to retain rights to pursue the deficiency, non-negotiable. But, I don't think this needs to be a show-stopper to achieving a good outcome for your client.
  • Chuck Harmon September 12, 2010 at 8:46am
    "...Borrowers that meet the eligibility criteria for HAMP but who are not offered a Trial Period Plan, do not successfully complete a Trial Period Plan, or default on a HAMP modification should first be considered for other loan modification or retention programs offered by the servicer prior to being evaluated for HAFA.
    In accordance with the provisions of Supplemental Directive 09-01, a loan meets the basic eligibility criteria if all of the following conditions are met: The property is the borrower’s principal residence..."

    The above verbiage was taken from the HAFA Guidelines. As I posted, this is not the owner's primary home. Do you still think it is permitted to pursue HAFA shortsale? I like the HAFA provision that rules out deficiency judgements and would to see my client get this protection. But again, I didn't think HAFA was applicable.
  • Michael Schneider September 12, 2010 at 5:49am
    Do you mean, cannot do a Fannie HAFA short sale? I think that would be the case.
    You can still apply for a short sale.
  • Bryant Tutas September 9, 2010 at 12:37pm
    Not true. I close FNMA short sales all the time on investment property. Speak to someone else.
  • Denim Wallace September 9, 2010 at 9:44am
    Interesting... I've noticed they've really been cracking down on those lately. We are dealing with one that they want a prom. note for the deficiency balance and this guy has had a significant decrease in income.
This reply was deleted.
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