Help - Freddie Mac HAFA demands from seller

Has anyone had this happen?

The seller is being asked to pay them over $2,000 per month while we try to short sale the home and if we are not successful they will agree to a deed in lieu.

Below is part of the phone conversation between the seller and the BOA bank rep.

"He basically said that we needed to sign the short sale agreement or our file would be closed.  He said this is something new that Freddie Mac is requiring (yep, just like that) and we have no other options if we want to complete a short sale.  I made the point that homeowners facing foreclosure and trying to complete a short sale to avoid it based on a relocation incentive being offered probably can't afford to make such a hefty payment (after all that's why we're headed in this direction).  While he sympathized with me he said Freddie Mac really doesn't care and those are the terms take them or leave them.  My next question was, ok let's say we sign the paper and for some reason (even though we have a very patient buyer) we do not close before May 15.  I would have this done tomorrow, but seems BOA is dragging their feet?  His answer was, "Well, it's not as though they are going to come knocking on your door and ask for the keys on day 121 (May 16), Besides that a deed in lieu of isn't all that bad, you still get the incentive".  Next question was, what if I sign the paper and can't make the payments?  His response, "I'm going to tell you right now, you don't have to worry about the payments".  Umm, Ok?  He said, "I can't even tell you who to make the payments to or where to send them".  
Any advice or experiences would be appreciated.
 

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Permalink Reply by Travis Davies on February 2, 2012 at 4:22pm

If you read their guidelines is specifically states they can. I've only had it on one file. My clients didnt pay it, WF threatened to foreclose it, but thanks to a good relationship with the negotiator we got it closed.

If you have questions contact the HAMP Admin directly. My guess is somewhere in your clients financials it looks like they can afford a partial payment. Maybe they arent disclosing everything to you?

Good Luck!

Permalink Reply by Joseph Alfe on February 3, 2012 at 12:37pm

As I have said before, Freddie has an internal directive NOT to approve short sales any longer.  They will not say this overtly, so they are simply making it difficult at every step of the process.

Permalink Reply by Kevin - Greenville, SC on February 3, 2012 at 4:45pm

Joseph,  Have you closed any recently?

Permalink Reply by Joseph Alfe on February 3, 2012 at 4:51pm

a few but it's been difficult.  We are no longer even accepting Freddie files, too much work.

Permalink Reply by Bryant Tutas on February 4, 2012 at 12:55am

I closed on 2 Freddie deals in the last couple of weeks and there was no issue at all getting them approved and closed.

Permalink Reply by Joy Baker on February 5, 2012 at 5:35am

Joseph~

I had not heard that.  Please enlighten me.  Do you know what their rationale is?

Joy

Permalink Reply by Joseph Alfe on February 5, 2012 at 5:46am

Mt theory is that Freddie is in much worse shape than Fannie.  Both GSE's are desperately looking for private buyers.  Also, with past and present Freddie Sr. Management under federal indictment for mortgage fraud, plus the new revelations that Freddie bought default swaps on their own product, lead me to believe that Freddie is trying some accounting trickery.  See, if they foreclose, the don't have to show an immediate loss like in a short sale.  The REO is shown on their books as an asset.  We know that once they dispose of the asset their losses will be much greater, but for the time being it looks like their balance sheet is stronger than it is.

Permalink Reply by Joy Baker on February 5, 2012 at 5:52am

Frightening but plausible theory, Joseph.  Thanks for responding!

Permalink Reply by Wendy Smith on February 5, 2012 at 7:37am

How do you know this?

Permalink Reply by Penny Howard on February 5, 2012 at 4:52am

Hi Kathy,

I had a WF Freddie Mac HAFA. The HAFA contract required my seller to pay $574.00 per month until we closed escrow. I contacted my Negotiator and was told: The calculation is based on the 31% rule of loan modifications, they feel the seller owes them that amount anyway, but, the seller will not be kicked out of the program if he DOESN'T make the monthly payment. WF could not take the monthly payment language out of the contract.. Seller did not make the payments and we remained in the HAFA program. What killed this short sale was the required sales price by WF/Freddie was too high for the product and I was forbid to reduce my list price or they would close the file and kick us out of the HAFA program. The contract also required that my seller vacate the property prior to close of escrow (this was due to seller's lifestyle & behaviors - I did not blame the lender for this ruling). Seller refused to comply so we canceled the listing.

I don't think I will take a Freddie Mac again either...I have successfuly closed a BofA HAFA with no problems whatsoever but it was not a Freddie.

Good luck Kathy.

Permalink Reply by Wendy Smith on February 5, 2012 at 7:36am

Good grief.

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