Hi fellow SS Specialsts, We are working on a Citi HAFA SS. We submitted at ARASS. The borrower received a letter acknowledging the request for short sale. A paragraph in the letter states 7. "Partial Mortgage Payments. Make partial mortgage payment of $1,354 by the first day of each month beginning March 1, 2103 until your property is sold and title is transferred. By making the first payment as outlined in this agreement, you are agreeing to the terms and conditions of the HAFA transaction." Paragraph 8. "Termination of Short Sale Unless otherwise stipulated by us in writing any approval of the short sale may be terminated if: h. You do not make the payments required as a condition of this short sale." QUESTION. Can the lender require the borrower to make payments to qualify for HAFA. We have not had one HAFA with this requirement. Thanks!
I had this about a year ago with a Citi deal. My seller didn't make the payments and we still got our HAFA deal closed in about 55 days. The sellers did not get the incentive, but it did go to closing. I am not sure that would be the case with every deal, but ours went well.
I have not seen another one since. On that particular deal, the seller appeared to have the income to support the partial payments when they first submitted the financial docs. However, they amended the docs once their unemployment stopped and turned them into the bank. I am not sure if that is why we got it through.
Not in California as it is unlawful to request the seller to participate. However, you didn't stipulate which state you are in. Best to contact NAR attorneys or your Association attorneys regarding this matter.
One of our limitations in working with third parties to approve a sale is the attitude of, "We have not had one HAFA with this requirement". So what? Maybe they changed their policy last night while you were asleep. You have to stay in the moment. Just find out what is required to get the transaction closed. That is our responsibility. We are not to determine whether we like and approve of the process. No matter your questions, you must comply with the lien holder or your lien will not be removed. We as agents forget that these are debts owed by the borrower to the lender. We want to simply sweep them under the rug because it is expeditious for us. Look at it from the lenders point of view and you will be of more service to your client.
This is in response to Dianne:
One of the many advantages of working within a group like SSSN is that we get to lift the fog of battle by finding out our colleagues experiences in similar circumstances with same or different lenders/investors. True, the rules may have changed last night. But it may also be that the processor or negotiator has it wrong. Wouldn't that be an unprecedented surprise!!!! It may also be that they try to get the payment and then go with HAFA anyway. Many of the lender's staff are under trained, over worked and under payed, all of which lead to errors. If something seemed wrong (as it does here) I would never assume the lender's rep is right - go with your instinct and challenge or investigate.
You are serving your clients very poorly if you accept as gospel everything the lenders tell you.
My instinct is that Brenda Noffert has it right, and my advise to Helen is to challenge the ruling as far up the ladder as she can, and when that's done take Rick's advice and call the NAR. I have had many clients be lead on by lenders with all sorts of promises if they will make just one or 2 etc payments only to find the lenders promises were never kept. Do not trust these lenders. Cooperate, but verify.
Neil, thank you for your eloquent response. We have found we service our clients best by delving in and asking questions of fellow colleagues and questioning the lender or servicer for clarification; along with escalating when necessary.
As it turns out, I had a great conversation with the new negotiator that inherited the file. He basically said if the borrower could not make that kind of payment, the file will still progress with review in the program. He stated:, " our main objective is to get this file approved and closed." He repeated that.
I appreciate this forum and the time people give of their day to respond. I will keep you apprised when we get the approval for an SSSN cheer! Have a fabulous Monday!
Onward and upward!
This is outrageous! If they could afford to make payments, they wouldn't be requesting a short sale!!! The object of HAFA is to help them move on with relocation assistance. The banks are receiving government funds to mitigate their losses. This is clearly contrary to the intent of HAFA! Have you considered writing a letter to your senators and congressperson about this? They may be interested in this twist of legislation.
I had a Wells Fargo serviced Freddie Mac require this. My clients complied as it was extingushing a $150,000 second.
The only time I have seen a payment requirement is with Freddie Mac. Check to see if that is the investor on the file.
There is a stipulation as part of the HAFA Program that the seller may be required to make "partial mortgage payments" to get approved for the HAFA Short sale. There is a section in the HAFA Guidelines that describes exactly what amount the lender may ask from the homeowner. However, the homeowner can decline making a partial payment and decline the offer for a HAFA short sale. They should still be able to short sale their home if all of the other necessary short sale requirements are met other wise. However, by declining the partial payment offer and ultimately, the HAFA short sale, they will not get any relocation funds at closing and there is also a risk that their deficiency will not be foregiven. Just some food for thought please make sure you notify the homeowner of their risks if they turn down the offer to make "partial payments' and the HAFA short sale. Also, have them sign a "Hold Harmless" form emphasizing this point with them.