Replies to This Discussion

Permalink Reply by Joan Lorberbaum Moore on February 22, 2011 at 8:07am

I thought retirement savings were not required to be revealed for HAFA, HAMP, etc. Is that correct? If so, why were they submitted?

Permalink Reply by Pacita C Dimacali on February 22, 2011 at 8:07am

I've had negotiators ask for contributions from the sellers, but haven't had one bold enough to suggest that the seller liquidate his retirement savings.

 

Also have had contributions come from the buyers, agents and sellers. As long as these contributions are on the HUD, they seem to pass muster. But we say no to very high numbers. For example, one negotiator asked for $10,000 contribution. Told her that if the seller had that kind of money, they wouldn't be behind on their mortgage at all and won't have to do a short sale.

 

The funny thing....a Wells Fargo lender (2nd lien) asked for contribution from someone, anyone. The buyers agreed to contribute $2K,  But when the 2nd lien short sale letter arrived, there was NO mention of that contribution. So we closed without having the buyer come up with the extra money.

 

So sometimes, it pays to "just say 'No!' ".

Permalink Reply by Liz Harris, MBA on February 22, 2011 at 8:33am

Joan, The retirement info was demanded to move the file forward... I would love to know if you are correct on this information not needing to be revealed. 

Pacita, Our demand was $30K between cash contribution and a promissory.  Every time I asked where the money was to come from, I was reminded of how much they had in retirement.  So, it was a connect the dots situation. We said, "no" multiple times. We then mustered up $3K and were then given an immediate decline.  I am now submitting a new offer and I don't want to have to go through this again with an unreasonable MI company. I know that the investor is happy with the purchase price as it exceeds the BPO. The investor stands to lose a ton more should it go to foreclosure and yet the MI company seems to hold the trump card.  The actuaries did NOT predict well for 2009-2012.

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on February 22, 2011 at 8:34am

Liz -

I'm actually shocked that either a lien holder or an MI company would directly ask for a borrower to contribute specifically from their Retirement Account - however you called it "retirement savings".  Is this a savings account or a true Retirement account such as a 401(k), 403(b) or an IRA, etc.? - there is a difference.....

 

Last year I had a short sale declined without reason BUT I know it was because the borrower, although "destitute" in terms of income and expenses, actually had about $1 Million in a 403(b) Clergy Retirement Account and would not spend roughly $25,000 of it as a cash contribution to the 2nd lien holder which would have provided no deficiency.  He dug his heels in and the house eventually went to foreclosure sale.  Neither lien holder ever asked for him to use funds from his 403(b) but in my heart-of-hearts, I know that was the reason. 

 

Thom Colby

Broker / Negotiator

Newport Beach CA

 

 

Permalink Reply by Liz Harris, MBA on February 22, 2011 at 8:43am

Hi Thom,

When I asked the MI company where the money was to come from, I was reminded about how much was in their 401K/IRA retirement multiple times. That is where I connected the dots, but it was an easy connection to make. Then, there were some other comments made which made me realize that I wasn't getting anywhere with this particular person at the MI company.

As I posted elsewhere, the actuaries obviously never accounted for 2009-2012. 

 

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on February 22, 2011 at 8:47am

Hi Liz -

 

I'm sure they will remind you of every penny they can find BUT they cannot ask for Retirement money directly (as yet, I expect that to change soon).

 

If the buyer is willing to pay it, then as long as the MI company and the lienholder approve it on the HUD, it shouldn'e be a problem.

 

Best of luck,

 

Thom

Liz Harris, MBA said:

Hi Thom,

When I asked the MI company where the money was to come from, I was reminded about how much was in their 401K/IRA retirement multiple times. That is where I connected the dots, but it was an easy connection to make. Then, there were some other comments made which made me realize that I wasn't getting anywhere with this particular person at the MI company.

As I posted elsewhere, the actuaries obviously never accounted for 2009-2012. 

 

Permalink Reply by Joan Lorberbaum Moore on February 22, 2011 at 9:04am

Liz, Sorry but I don't remember where I read/heard this. Nonetheless, it all seems quite unfair. Also, there's the possibility (Disclaimer - I'm not an accountant!) that funds removed prematurely  from an IRA  to satisfy a cash contribution will be taxed.

Liz Harris, MBA said:

Joan, The retirement info was demanded to move the file forward... I would love to know if you are correct on this information not needing to be revealed. 

Pacita, Our demand was $30K between cash contribution and a promissory.  Every time I asked where the money was to come from, I was reminded of how much they had in retirement.  So, it was a connect the dots situation. We said, "no" multiple times. We then mustered up $3K and were then given an immediate decline.  I am now submitting a new offer and I don't want to have to go through this again with an unreasonable MI company. I know that the investor is happy with the purchase price as it exceeds the BPO. The investor stands to lose a ton more should it go to foreclosure and yet the MI company seems to hold the trump card.  The actuaries did NOT predict well for 2009-2012.