Hello,

We have been negotiating a Short Sale that had originally both mortgages with Homeward Residential. Now, the 2nd was transferred to Real Time Resolutions, Inc.

Homeward approved the Short Sale and only pays 10% of the principal balance to the Subordinate Mortgage. The person in charge of the file at Real Time Resolutions, Inc. came back, and refused, after the previous negotiator accepted it the 10%, to issue Short Sale Approval until the 1st give them $ 8500.00 as this Short Sale is under HAFA program. 

We came back to Homeward and requested the $ 8500.00 to the 2nd lien and the answer of the negotiator was that Homeward HAFA guidelines was to only pay 10% and they will not reissue their approval. 

There is also another silly issue, the buyer is willing to come with the funds to cover the difference between between what has been approved by Homeward and what the 2nd lien holder is asking. Real Time Resolutions, Inc. refused to take it like that and the response was the money had to come from Homeward.

It's a battle of power that it's not making a lot of sense. 

Any thoughts on how to deal with this situation. We have contacted HAFA today to get a clarification on the guidelines that to confirm that all of them apply to all banks and banks can't modify the program and its rules.

If someone out there has ever had a situation like this please share your 2 cents and the results.

Thanks for your time!!!

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RTR is a collections agency and they are VERY uncooperative. 

Actually, I don't take any files where RTR is involved and if RTR becomes involved with a file I'm already working on, I drop the file.  My time is too valuable to deal with uncooperative entities.

I had one similar to this, the 2nd would not budge, but the buyer still wanted the property and was willing to pay the difference but the first said any extra $ would have to go to them.  I checked with our attorney, and we worked out a deal where the buyer paid the difference to the 2nd first, then they issued a new approval with the amount the 1st. said they could get.  The deal closed.

I may be wrong, but where does it say the second trust has to cooperate with the HAFA program?  I think the first trust can offer it to the seller, but the second trust holder does not legally have to cooperate with the $8500.00 offer and can throw the entire HAFA deal if they are not satisfied with the $8500.  The seller will get at least a $3000 relocation allowance from the first trust if HAFA goes through.  The seller should find a way to pay the difference between 10% and $8500.  They will probably be refunded by the first trust ($3000), so really the first trust is sort of giving the money to the second, by way of a "relocation assistance" to the seller :).  OR TRY to get the first trust to pay the $8500 and waive the relocation allowance to the seller.  Good luck.

I recently had a similar issue on a file.  The deal qualified for HAFA with the first, but no relocation money because the property was vacant. So we opted out of HAFA, asked that the first forgive deficiency, and then the second mortgage accepted the amount the first mortgage originally offered and backed off the $8500.  In the HAFA guidelines, I believe it does state that no party can contribute to the second mortgage. Also, if you are asking a buyer to contribute to a second mortgage it must be with the first mortgage's blessing, on the HUD, or it could be construed as mortgage fraud at some future date.  That's not to say that the homeowner can't make a payment at any time towards their balance...but it should come from the homeowner not the buyer.

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