Is HUD cracking down on guidelines? Is it true that, in order to proceed with a short sale, the seller must have an involuntary hardship? I can go into more detail regarding my client's hardship, if need be. Midland is stating that their hardship is voluntary, and the wife could work in order to be able to afford the mortgage, but she chooses not to, in order to take care of their child. Any suggestions, superstars? I would love some feedback!
You need to be a member of Short Sale Superstars to add comments!
**********************************
like buttons
Replies
Corinn,
what I've experienced is that frequently servicers try to ignore PFS guidelines all together, and just process them like any other short sale. I usually quote them to the servicer chapter and verse along with my reply, as in: according to HUD Mortgagee letter 2008-43 Section B. In this case that says, "
B. Mortgagor Qualifications
The PFS option may be extended to mortgagors who:
Are in default as a result of an adverse and unavoidable financial situation. Adverse and unavoidable financial situations may include but are not limited to loss of job or verifiable income reduction and extensive medical expenses;"
So I guess the question here is this situation "unavoidable". If it was me I'd see if you could show that she's trying to get a job (if she is) and remind them of the current unemployement rate and lack of available jobs. If she's not looking for a job, explain the necessity of staying home. I'd go straight to HUD if the latter is the case and see if they can clarify it for the servicer.
It doesn't matter if their hardship was voluntary or not according to HUD, Lender's must still follow HUD's Loss Mitigation Guidelines (doesn't matter if the Borrower went out and purchased a Lamborghini). I was just at the HUD Training Center in OKC about a Month ago and this was taught.