Concerning FHA Short Sale Dept. using outdated appraisals for comparables.
I am representing a client who is currently marketing his property for short sale.
We are working with the Government Loan Short Sale Dept and have just received a rejection for an offer that was submitted for the purchase of this home.
The reason for the rejection was that we were below lender's desired net price.
I asked our negotiator what that net price would be and was given an amount that, with escrow fees, would hardly appraise in this market.
I then asked for a current appraisal to be done. I was told that 2 appraisals have been done and no further appraisals would be performed.
I have requested a desk review and received back these requirements in submitting request for review - I would need to submit 3 comparables that closed less than 6 months before the effective date of the appraisal (no current market date - pending, sold after appraisal, under contract is NOT acceptable.)
I then asked for a copy of the last appraisal and was shocked to see that the last appraisal was performed on 2/17/2010.
I would have to submit comparable that are 1 year - 1 1/2 years old. The average market price in our area has dropped at least $30 sq. ft. in this time and I'm concerned that this lovely home won't appraise for the prices that were acceptable in our market 1 1/2 years ago.
Can anyone please advise me in how I can best serve my client in moving forward?
Thanks
Replies to This Discussion
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Permalink Reply by Kevin - Greenville, SC on
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I do think the variance process is sufficient in most circumstances (is it perfect, no). I just received an Approval for $12,000 out of the net proceeds (I'd like to see that done on most other types of loans) towards subordinate non-Mortgage lien holder(s) when the 'guidelines' are for $2500 including the PFS Incentive to the Borrower, a $3100 payment to an HOA in a non-super lien State (I'd also like to see this done on other types of loans) and I have received a 2nd ATP months after the previous one had expired. Do you have to fight the Servicer to submit a request for Variance the answer would be yes; I have never had a PFS fail out of about 15. Think of Mortgagee Letter 2008-43 as the Mortgagee's Delegations from HUD (the program is not ridged in my experiences).
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FHA Loss Mitigation is Federally Regulated and Mandated.
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Permalink Reply by Ken Bailey on
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Kim--if I may jump in this discussion and share my recent experience...mine is very similar to yours so I won't go into to detail. Just as I was about to throw my hands up, Kevin contact me and gave me some great advice that seems to be FINALLY producing some progress, so I will pass along. First of all, get in touch with the management levels of the Servicer you are dealing with (I couldn't find that info in your post). I didn't know who my mgt levels were at the time, but the good folks on this site (Kevin) were able to steer me in the right direction. Once I contacted them, my file was submitted to FHA that same day! We are still waiting on a verdict, but I am just thankful that I was able to finally able to get it submitted to the investor...something that I had been trying to have done for over 2 months prior at the Servicer's grunt level without success. The mgmt folks I am dealing with now CALL AND EMAIL ME DAILY to give me updates, even though there is no new information. I am shocked by this, and very grateful for this level of service. Thank you Kevin!
One thing I would like to add...where is this 2 appraisal max on FHA loans coming from? I could not find it in the PFSP doc or ML 2008-43. If we could eliminate this silly rule, we would prevent most of the problems we are all having with FHA short sales! Kevin, I hope you are addressing things like this at your HUD summit.
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