I am working on a Midland short sale now. The mitigator at Midland is telling me that she will not give the short sale deficiency waiver until the closing day which puts my poor seller in bad position as it doesn't give her a chance to have her attorney review it before the closing day. The negiator at Midland tell us that because it's an FHA loan, they will not give the deficiency waiver (letter) until then. Midland said not to worry, that FHA is not currently persuing FHA deficiencies so she said that it is not thier policy to issue one prior to closing and they will not budge. Anyone have any ideas? This short sale has been in review for 3 months and now they tell us this. Anyone have any ideas or similar experiences?
I hear that collection of defiencies can be done up to 15 years from now. Most are not persuing now I heard also but that's not to say they won't/can't down the line, right? So when the seller is on their feet financially years from now, they can come after them.
The other part of this post had to do with Midland not issuing the deficiency waiver until closing day which will not allow enough time for seller's attorney to look over. We asked that they issue it now, but they refuse.
That is patently untrue. Collection of deficiencies would be governed by whatever your state's statute on written contracts is. In most states, that is 6 years from the initial date of default, which would most likely be interpreted as the closing date. On a foreclosed property, it's possible/likely that it would be interpreted as the date they missed their first payment.
Perhaps escalating the file would help.
This particular negotiator has an attitude and I'm worried that she'll deny the file for spite if I escalate it. I would normally do so but I have a feeling about this negotiator.
From the horses's mouth at Chase- the negotiators have a quota of short sales they must get approved every month. It's not in the negotiator's best interest to mess with you.Escalate the file when you call Chase, and be pleasant about it. Short sales are the definition of catching more flies with honey than vinegar.
What Midland is telling you is correct. FHA doesn't issue their final approval letter until after they have received the final HUD for approval. They should have sent you the HUD Mortgagee Letter 2008-43 when your seller got accepted into the program and that has HUD's rules which state:
P. Mortgagor Consideration
Mortgagors, acting in good faith, who successfully sell their properties using this option are
relieved of their mortgage obligation and are entitled to a consideration of $750. If the closing
occurs within 3 months of the approval to participate
, the mortgagor will be entitled to $1,000.
Unless the mortgagor’s consideration is required to release junior liens, the mortgagor may elect to
accept cash paid at closing. The mortgagor may also apply a portion of or the entire amount of
consideration to offset sales costs not paid by HUD; including a home warranty plan fee, costs of
optional repairs, and buyer’s closing expenses. If the PFS is unsuccessful and foreclosure occurs,
mortgagors who participate in the PFS Program in good faith will not be pursued for deficiency
judgments by the mortgagee or HUD.
Hopefully that would help your seller. You can look it up on the HUD website as well under 08-43 at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sf...
Does this include closed short sales?
Yes the Mortgagee Letter talks about short sales and foreclosures.