Here we go again.  .. Lenders are giving different interpretation of new CFPB guidelines effective Oct 2017.  Bank of America is stating that borrower/seller MUST apply for Home Retention ( modification) before they can be considered for short sale and they cannot opt out no matter who the investor is.  SPS is stating the opposite. That seller can opt out and choose just to do a short sale.  OCWEN has not given a clear answer yet.  Has anyone else come across this issue?

Tony Morales

TM Short Sales Consulting

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I was doing a short sale with Caliber Home loans and they told me no more short sales only DIL.

that's ridiculous   They cannot due a DIL if there are junior liens/mortgages.  And according to what I am reading, the new CFPB guidelines require lenders to offer ALL options to avoid foreclosure.  Can you get that in writing from them?  I would have your seller call and challenge them

Tony, do you have a copy of the new CFPB guidelines? I would love to read that, as BOA just told us the same thing but when we pressed to get a copy of the new rules we were told NO.  A lender offering a DIL IS unfortunately an alternative to foreclosure. They make the homeowner negotiate the second mortgage and allow a payment.  It really stinks.  That would suck if Caliber only did that now, but to be honest, my last 2 Caliber sales didn't get approved.  I was told the investor wanted a price that was double market value and because we couldnt' get it, they would only offer the DIL.

CFPB rule 1024.41 (c)  it does not specifically state that servicer must require a borrower to apply for modification prior to doing a short sale. It does state that servicer may offer all loss mitigations options.

here is reply from B of A manager:

Hi Tony. Per our direction the bank has updated our process in response to CFPB updates. I’m not in a position to interpret the individual regulations but I can say that our process now requires a borrower to go through a retention review and be provided a decision in order to move to a short sale review.

I have also spoken to Wells Fargo  and they are not requiring modification review prior to short sale

Below was her response. The short sale approval letter expired 10-27 and she sent this 10-25. : 

Angie Fraguas, Jennifer Fabi
I regret to inform you that Short sale is no longer an option. Borrower/Seller can apply for DIL, see below LMA application.

I am wondering if their policy is related to the new CFPB guidelines.   from my understanding is that they must offer home retention option to the borrower. You may want to ask them

Could anyone share a link to these new CFPB guidelines?

there are 901 pages of the new guidelines   here are 2 pages that I feel are applicable


Cool thanks....I can see how that could be "open to interpretation"...sigh...



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