I listed my client home with (Bank of America) as a FHA short sale. The owner who has defaulted on her mortgage payments and has failed two loan modification guidelines. We have a short sale and a accepted offer from the owner. I submitted all the requested information, documents with the short sale package. Now the owner got a call from a customer service manger that stated that we must re-list the property in the amount of the payoff which is over  $100,000 of the market price. How can we be asked to list the property at the payoff amount with the home that's upside down and would surely sit un sold and forced into foreclosure. Vacant homes for a long period of time can become molded inside, possible thieves stealing the heat pump, kitchen appliance, toilets etc, especially in our area within the last few years due the high number of vacant short sale and foreclosures homes. I don't claim to be the know it all in short sale but this request just don't make sense to me in this real estate industry. Do anybody have any comments about this situation. Thanks

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Terrence, FHA has very specific guidelines with regard to how their Preforeclosure Sales Option (their term for Short Sale) must be handled and I find that many Servicers do not know or care and, if the agent does not force them to do it correctly,  it always comes back to bite everyone involved in the transaction in the butt. 

Seller/Borrower financial package must be submitted first and an FHA appraisal must be done.  Once financials are reviewed and the appraisal is received (the borrower and their agent have a right to that appraisal by the way) an Approval to Participate is generated by the Servicer and must be signed by the homeowner.  That ATP will list the FMV as well as the net that will be required if the property sells in the first 30 days.  The property may not be listed for anything less than the FHA Appraisal's Fair Market Value. 

Did you follow this process?  Have you received and looked at the appraisal?  If the appraisal is off the wall, you CAN force a 2nd appraisal through FHA.  Contact the National Servicing Center at 1-877-622-8525.

 

Joy: I contacted the customer service department as requested by BOA. They mailed the short sale package to the owner and we followed all the guidelines and submitted the package back to BOA and once we were assigned a customer service manager, the transaction changed. I have attempted to contact the manager for two weeks now and requested an appointment for the manger to call me on yesterday to no avail. We are asking for an explanation and for an FHA appraisal to be completed. It’s not personal but we will be escalating this confusion to mangers at BOA headquarters for some explanations and answers.

Thank you for your insights, I thought I had miss something, I have completed several short sales during my five years working with short sales and I find that they are never the same.  

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