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Have I been sleeping under an FHA rock?

Posted by Drew Ludlow on October 22, 2013 at 6:21am in Short Sale Discussions

I've done a bunch of FHA short sales over the past years and the process has always been very similar.  The borrower is reviewed, submits paperwork, the ATP is delivered with a recommended min net etc, etc., list, sell, submit and then the approval letter comes about 1 week after submission of the offer.

Just today, however, I was told that FHA doesn't always issue ATPs and that a file will not even be reviewed if there is an active foreclosure without an offer.

I was always under the impression that an offer would not be considered if the ATP had not yet been issued.

When did this change - or has that always been the case?

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Replies

  • Wendy Rulnick October 23, 2013 at 12:45am

    Great discussion, all!

  • Kevin - Greenville, SC October 22, 2013 at 9:50am

    Yep.  Always the case but never really enforced until the new Mortgagee Letter.

  • Drew Ludlow October 22, 2013 at 7:54am

    I did a little more 'research'.  Apparently, as of 10/1, this is a new guideline.  FHA PFS reviews can not be initiated without an offer to purchase on homes that are already in the foreclosure process.  Only homes that are not in f/c can be reviewed and an ATP issued without an offer.

    • Kevin - Greenville, SC > Drew Ludlow October 22, 2013 at 9:56am

      That's not quite what the ML states, but that's the NSC of HUD's interpretation (incorrect in my opinion) of it.

    • Alexis Adams > Drew Ludlow October 22, 2013 at 8:07am

      Is this loan being worked through Equator? Wells Fargo's SS initiation in Equator doesn't request offer information until after ATP is given. Unless they changed the way they are now working in Equator. I just emailed a good contact of mine at Wells to try to get clarification. I attached a copy of the Mortgagee Letter 2013-23 but it doesn't really specify anything about the ATP review/process.

      2013-23 Mortgagee Letter.pdf

      • Drew Ludlow > Alexis Adams October 22, 2013 at 8:22am

        Exactly... I can not find anything in writing.  But yes, this was initiated through EQ.  The doc collection began and then I received a message from the processor that told me if I did not have an offer, the file would be closed out.  I was welcomed to re-initiate once we had an offer.  I called WF and spoke with a random person and she confirmed that this is the new policy for any FHA SS that is already in the f/c process.  If it is not in f/c, you receive the ATP first.  But if it is in f/c, you must get an offer first, and then the ATP follows.

  • Alexis Adams October 22, 2013 at 6:39am

    I have only run into this with CitiMortgage. Once getting HUD involved (even with a scheduled sale date and NO offer) we received our ATP. 

    • Drew Ludlow > Alexis Adams October 22, 2013 at 7:18am

      Would you recommend getting HUD involved?  This is with Wells Fargo and there is no sale date.

      • Kevin - Greenville, SC > Drew Ludlow October 23, 2013 at 1:04pm

        HUD will tell you the same if it's been referred for Foreclosure.

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