Hi, I'm working on a short sale listing that has been in contract for 4+ months. The original servicer was Bank of America and then transferred to Seterus a few months ago. We were required to use LRC to facilitate the short sale and negotiations. The buyer is obtaining an FHA loan and requested a 3% credit including their lender fees and upfront MI. We just received an email stating the following:

3.       No lender fees allowable

4.       We will only pay the owners policy and you will need to provide the statement saying the owners policy is delinquent in the amount that you are requesting.

Has anyone experienced this on any of their short sale listings w/ Seterus, and if so were you able to negotiate for them to credit for any lender fees? Any feedback would be greatly appreciated.

Thanks in advance,

Eric

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If the seller also has an FHA loan 1% concession is allowed. Otherwise is could he up to the servicer. If the price is low, I try to stress the importance of the concession for the buyer type

Why did you agree to allow LRC to negotiate the short sale? This is a"bogus" conflict of interest...3rd party company that charges a 1% "Negotiating fee", leaving you with 5% instead of 6%.  I told them NO and I would challenge them again, on items I caught them doing which was  OUTRIGHT FRAUD!

I've ALWAYS seen closing costs up to 3% be paid on EVERY FHA or VA purchase contract. Only time I've had ANY servicer decline closing costs or trim them is if the purchaser was ALL CASH or conventional loan...then the servicers feel, THESE buyers have money, and frankly, why should they HELP them...which sucks but, that's the way the servicers think.

Find out WHO the investor is...I won't start a short sale ever, without know WHO the investor is OVER the servicer's head...this can change the whole outcome of your commission structure and the short sale approval itself and items that WILL be or WILL NOT be credited.   I'm not sure about MI...can't help you with that  sorry.

I've heard from tons of other agents that LRC does NOT know what they are doing...and I believe this.

 

FHA will normally only allow 1% in seller concessions UNLESS the buyer is getting FHA financing. Then it's 1%.

Here is the FHA list of allowed and non allowed expenses. It's not up tp Seterus it's based on HUD FHA guidelines.

Any exceptions require asking HUD for a variance.

Thank you all for the feedback so far. According to the negotiator, the investor is not allowing for any lender fees to be credited back (including the upfront MI). I'm trying to find out who the investor is.

Thank you,

Eric

I believe it is part of Fannie policy (I've found that Setuerus is most Fannie) that no buyer's loan discount points or pre-paid escrows can be paid from the closing costs credit. Wells Fargo in some instances will require a buyer's GFE (Good Faith Estimate) and chop out what it doesn't like.  Usually dropping any requested closing costs to around 1%. 

The piece about the owner's policy being delinquent is just plain sad....They really don't have a clue....

You may have better luck in turning this back to Seterus, but it will likely be a few week delay.  Escalate? 

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