Maximum amount that the 1st lien holder will pay towards the 2nd is $8,500. If the 2nd wants more, can the buyer and/or agent pay the difference? I am being told by the 1st lien holder that it is a direct violation of HAFA and US Treasury guidelines if that is done and that the max is the max!
If this is the case, where can I find it in writing? I checked making home affordable site and cannot locate that information.
Thanks.
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Subordinate Liens. We will allow a total of up to (i) [insert the lesser of $8,500 or maximum amount
allowable by investor] to pay subordinate mortgage lien holders to release their mortgage liens and (ii)
[choose one as applicable] [$______] OR [______% of the gross sale proceeds] [insert amount or
percentage, as applicable and as determined by servicer] to pay subordinate non-mortgage lien holders to
release their non-mortgage liens, in each case to be deducted from gross sale proceeds. We require each
subordinate lien holder to release you from personal liability for the loans in order for the sale to qualify
for this program, but we do not take any responsibility for ensuring that the lien holders do not seek to
enforce personal liability against you. Therefore, we recommend that you take steps to satisfy yourself
that the subordinate lien holders release you from personal liability.
I would say "recommend that YOU take steps to satisfy yourself...." is a green light, but I don't know. It doesn't mention specifically the coop incentive.
All subordinate lien holders will be paid in order of priority. Subordinate mortgage lien holders with subordinate liens secured by a mortgage on the subject property may be paid no more than an aggregate cap of $8,500.
https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahand...
I've had a Bank of America HAFA Coop where the seller was allowed to use his incentive to reimburse the title agent on the HUD. I don't know if they were referring to the "coop" portion. I am sure one of our members knows HAFA guidelines by heart. Let's see what he or she says!