Does Flagstar want to foreclose?
Ok, here's my story. I'm a homeowner with an FHA loan with Flagstar. We stopped making payments on the loan in August, and submitted a loss mitigation package to them immediately. On Oct 17th they denied us for a loan modification (which was ok - we are after a short sale) and said they do not approve short sales until they have an offer (which I now know is wrong for an FHA loan).
We hired a realtor and put the house on the market, supposedly on Oct 30th, but come to find out the realtor didn't bother listing the house until Dec 5th, and didn't submit the short sale package until Dec 15th - thats another issue entirely, but Flagstar had the short sale package on Dec 15th. Since then they have closed the file 7 times for literally every reason you can think of, Every time they close it I resubmit with whatever new information they are asking for and am told 30-60 days before they will look at it again. I've done 3 financial interviews with "specialists" and been told the file is in all sorts of different stages.
On Mar 1 we received a good offer. The house is listed at $208k, the offer was for $200k. We submitted the offer immediately - and the bank immediately closed the file again (they couldn't read something on the purchase agreement). We got the file reopened again, and I called for a status today, as I do every week. I should mention that the foreclosure sale date is set for April 6.
When I called today I was transferred to a very rude woman to do a financial interview. She asked a bunch of questions, reviewed my info, and said they would have to turn me down for a loan modification before they could look at me for a short sale. She said this had to have been done within the last 6 months. I told her we had been turned down in October, so that was within 6 months. She said they had to do it anyway. I asked if they would postpone the foreclosure while they did this - she said no. She also said it would take 4 weeks to look at the file again - which is more time than I have before they foreclose.
I called HUD and opened a ticket and am waiting for them to get back to me.
So here are my questions:
Does Flagstar prefer to foreclose instead of approve an FHA short sale? Is this so they can come after me later for a deficiency judgement? Does anyone know of a way to either postpone the foreclosure or just get them to look at the offer we have in hand? Any advice would be appreciated - I'm at my wits end with this process. Thanks so much!
Replies to This Discussion
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Permalink Reply by William C. Black on
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Sarah,
As a previous Mortgage Professional working directly with Flagstar and watching them slide down the customer servicer scale for the last 5 years I would first like to say I apologize for Flagstars rude behavior.
The good news is that you are heading the right direction. As a Business Development Manager for a law firm that specializes in default solutions and short sale negotiations going directly to HUD is the answer.
I would question the capabilites of the Agent if they hadn't told you that a PFS or Preforeclosure Rerquest is required prior to listing a FHA short sale. Flagstar is only the servicer for FHA and they receive .50% of your loan amount as servicer but they have written policy to follow and can lose the servicing right if they get enough complaints.
It is normal for us to make three way calls daily with HUD and they straighten out the problem.
Flagstar is profiting from all the additional work they are doing- escalate directly to HUD constantly. Ask your agent to prove how many FHA short sales they have completed-- don't be the guinea pig for them to learn what does not work.
If you know of someone in Washington or Oregon that needs default solitions assistance including short sale negotiations please pass on our name.
Bill Black CMP, CDPE
360-910-3290
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Permalink Reply by Sarah on
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Thanks for the reply Bill! I kind of wish I had fired the realtor a while ago - they are supposed to be short sale experts and even answer short sale questions as an "expert" on a couple of the news stations here, but turned out to be pretty horrible. They fired the first agent we had and reassigned us to a new one that isn't much better. Unfortunately now we have one offer in to the bank and I just heard that we got a second one (for full asking price) today, so I think I'm stuck for the moment.
Anyway, I appreciate your advice and am happy to hear that I am on the right track. Thanks!
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Permalink Reply by Michael D. Schade on
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Sarah,
Just when I thought I'd gotten Flagstar out of my mind once and forever,you gave me reason to jump in again. Flagstar has to have a method to their madness,but no one has been able to figure it out,yet. I have a feeling that HUD has a mess on their hands, as it pertains to Flagstar.
Your story has been played out numerous times and they(Flagstar) really don't no what day it is. I've heard so many stories & experiences about them,I'm inclined to believe everyone of them.But,to really give you any satisfaction,would be putting my reputation on the line. These are not honest people and they are in trouble,no doubt. If you are not calling everyday,you might want to do that and find that rose between all the thorns.
We finally closed with Flagstar,if that makes you feel any better,but it took determination,the likes I've never used before, to get it done,oh, did I mention months and months and months of time.
As William Black has indicated the PFS is a necessary element to you success.
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Update: Flagstar says they ordered an appraisal. No word yet from the appraiser to schedule a time, but I'm sure that will be coming soon. We have a second offer now for full asking price - but of course we don't know what the bank will accept, so we continue to wait. 12 days to foreclosure sale date...I'm actually starting to feel a little bit optimistic...
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Another update (I'm hoping someone can learn from our experiences): I spoke to the bank today (our foreclosure sale date is in 1 week). They said they had sent a variance request to HUD to postpone the foreclosure. I had no idea that they had to request a variance in order to postpone - this makes no sense to me at all. They also said that IF HUD approves the variance to postpone the foreclosure they will continue to review the file.
Still no approval to participate, the appraisal that was supposedly ordered wasn't, and we're left hanging again. I couldn't be more frustrated at this point. I'm scared to death that they are going to foreclose on the property next wednesday and we're going to have a week to pack and move across country.
Has anyone else had to get a HUD variance for the bank to postpone the foreclosure?
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Dearest Sarah...
I am dying to know how it turned out??? I will be waiting 8 months for a short sale on April 20th... I need some good motivation!!
Thanks,
Beth;)
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Permalink Reply by Nancy Fung Martin on
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I have contacts for Flagstar. Email me if you still need help. It worked for me and I got my approval letter in 2 weeks.
Nancy Fung Martin
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We were just told that we have to wait one more month while they do a 'subsequent review'.
How did you get your approval letter??
Will they close our case / put our file at the bottom of the pile if we bother them??
Thanks!!
Beth:)
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Beth, send me an email and I forward the info to you. Thanks.
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Hi everyone - we finally got our approval letter, and they countered the offer from our buyer. The buyer accepted the counter and now were just waiting for final bank approval and a closing date.
Beth - we were told to wait a month for a subsequent review about 5 times. It seems like Flagstar won't do anything until your foreclosure date - if you are close to that date I suggest opening a ticket with HUD - I'm not sure what caused ours to start moving, but it happened right around the sale date (and when I filed a complaint with HUD). While we were still a ways out I called once a week to check the status of the file and to check for new documentation requests, since they never notify you if they need something - they just close the file. I don't think it hurts to call. Once we were within a month of the sale date I called twice a week, then every day.
I'm pretty sure that they work the files in order of foreclosure date, so you may be put to the bottom of the file just for that reason.
Good luck!
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Ugh. The worst realtor ever strikes again...so the bank countered the offer and the buyer accepted the counter. I signed the paperwork last Friday. I called the bank today to find out if we have final approval yet. They haven't received anything back since the counter - no acceptance, nothing from the realtor. I could cry. I tried to call and email him to find out why, but I haven't heard back yet. He's telling us the buyer wants to close "the first week in may," which is 2 weeks away, and he hasn't even submitted their acceptance. And I have no closing date. We're moving across the country when this closes - I can't even rent a place yet. I can't believe how incompetent this realtor is - I hope he isn't a reflection of the entire profession. It drives me crazy that he gets to make a few thousand dollars off of screwing me over.
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Hi Sarah,
I am interested in how you filed a complain against Falgstar. I would like to do the same. I went to the HUD website and only saw a complaint process for discrimination. Can you provide information on what type of complaint you filed and what steps you took? [email protected]
Thanks!
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