Working a HAFA requested short sale through Equator (conventional loan; First and second with GMAC, interest only loan + HELOC - $592,000 total owed).  Did not wait for bank to set price and began marketing in the MLS at $385,000 - figuring I'd ask for an alternative RASS.  Has been on market for 50 days - one price reduction to $375,000 before negotiator came back and told me to list at $450,000. (My client signed a systematic price reduction scheduled every 3 weeks until we get an offer, but I only made one based on bank's response.)  Unrealistic list price given the comps and market feedback; have had 15 showings with no offers and property feedback that the home is priced at market value.  (Interesting - just had another short sale in same community of a comparable property - with PNC - closed in two months at $380K.)  Submitted an elaborately detailed re-evaluation request and included appraisal from the above-mentioned home.  Bank came back and reduced to $425,000.  I am getting zero interest at $375,000 and feel if we list at $425K we are nailing that coffin shut!  Are they squeezing us out of HAFA?  My client wanted to do HAFA so she would not have a deficiency judgment and that is the only reason.  She is 74, just lost her job because she has gone blind, panicked and was afraid she would be out on the street and moved already (and then contacted me!) so the house is vacant. (Bank has notified her they are changing locks.)  She is paying $220 HOA fee each month but not the utilities.  So far, I have been paying those and other upkeep - it's a big house and the electric has been over $200 a month even with air set at 85. 

I have not had a successful HAFA yet, and have not worked a short sale through GMAC.  How long at bank's list price before we can reduce?  I know there is a 120 day marketing period.  Does that start from when I change MLS to bank's price?  Should we forgo HAFA and take our chances in a regular short sale? 

To complicate matters I have been approached by an agent with clients that have been forced to move from this subdivision (active 55+) because they have had to take in a grandchild and children are not allowed to live in the community longer than 3 months.  They sold their home in this community and they want to rent this house until Dec. when they can move to their new home.  Sounds enticing given I am paying upkeep on the property but not sure the ramifications.  It does sound like if we market at bank's price we certainly will be in negotiations for four months.

Any experience, advice or feedback would be appreciated.  Thanks.

(Also posted in GMAC forum.)