Yes....FHA PFS Short Sale....You're STILL my favorite!!!

In the oftentimes chaotic world of short sales, the road from initial list to closing is filled with rough terrain, speedbumps, wrong turns, u-turns, no turns, stop signs, and many detours. Nary a day I fail to hear the laments of yet another agent succumbing to the trials and toils of short sales. In fact, in my 7 years of selling everything from normal market re-sales to REO and short sales, I've dealt with many different (and often frustrating) short sale transactions. In fact, I've had too many to count! I must say, however, that when I first found out about FHA's Pre-Foreclosure Sales Program....I instantly fell in love! It was Short Sale Xanadu!!!

The FHA Pre-Foreclosure Sales Program enables a home owner to short sell his property (provided he has a FHA loan, of course) with a very little amount of fuss and muss. Prior to being officially enrolled into the program, an appraisal is conducted on the property to establish fair market value. Once that magic number arrives on the desk of the Negotiator from the Appraiser, it becomes the list price...VOILA!!! No more guesswork on how much the bank will require for the sale of the property! Not only that, this program takes it a step furthr and gives you their secret formula of how much the bank must net as the market time increases! In addition to letting the listing agent in on the holy grail secret of what the bank has established as market value, the program also has other benefits:

*Up to $1000 in Seller Relocation Assistance (reduced to $750 if it takes more than 3 months to close)

*Pays up to 1% in buyer's closing costs as long as the buyer's using an FHA mortgage (Sometimes they'll pay up to 3% regardless of financing as long as their warm fuzzy number's met. Ask for a variance)

*Allows up to 6% sales commission for agents (yep, we actually get paid for what we do....what a novel idea!)

*Allows up to $1500 towards junior lien discharge

The benefit of knowing EXACTLY what you're dealing with even before the property technically hits the market makes the listing agent more knowledgeable about the short sale process AND makes the property more marketable to the buyer. For these reasons, my love affair with the FHA Pre-Foreclosure Sales Program will never end!

 

Happy Selling

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Comment by Vanessa Calhoun on February 15, 2013 at 7:28pm
Thanks, Tyra G!!!!
Comment by Tyra G on February 15, 2013 at 4:31pm

I think they're great as well Vanessa! Great post! 

Comment by Sean Seaman on February 8, 2013 at 4:08pm

 Figured as much.  Thanks Vanessa and Kevin for your responses.  Have a great weekend.

Comment by Vanessa Calhoun on February 8, 2013 at 3:54pm

It very well may not be. Normally, Equator links BOA 1 and 2nds together if they're both Serviced by BOA. However, FHA PFS is not handled through Equator. You'll need to do some digging to find out who owns the second and try to contact them directly.

Comment by Kevin - Greenville, SC on February 8, 2013 at 3:52pm
Comment by Sean Seaman on February 8, 2013 at 3:51pm

Thanks for your insight with this, much appreciated.


Cheers!

Comment by Sean Seaman on February 8, 2013 at 3:50pm

 The 2nd was sent to "PHASE 2" the first week of November.  The 2nd has not given approval as of yet.  The negotiator submitted for approval earlier this week and claims another 2 weeks.  Then the file goes to quality review, which should take 3-5 days, then its sent to a closing specialist and within 48 hrs. of that we should get the full written approval, or so they say.  The 2nd lien was NOT referenced on the initial ATP letter.  The 2nd is not backed by HUD, maybe that is the reason for such delays?

Comment by Vanessa Calhoun on February 8, 2013 at 3:46pm

Keep in mind that the ATP stipulates that the Servicer has 5 working days to respond that doesn't necessarily mean "approve". A lot of times, "we've received..yada, yada, yada...." is a response. I'd suggest that you contact HUD's Servicing Center Hotline for assistance. You'll need to fax your 3rd party Authorization letter to them (be sure to include the FHA case number). They've come through for me several times in the past with prodding the Servicer to move the file along...especially if the buyer's about to bolt.

Comment by Kevin - Greenville, SC on February 8, 2013 at 3:35pm

J. Contract Approval

The mortgagee will have 5 working days from receipt of an executed Contract for Sale to respond back to the mortgagor using the Form HUD-90051 (Sales Contract Review). The PFS transaction must be an outright sale of the premises. 

 

Source: Mortgagee Letter 2008-43

Comment by Vanessa Calhoun on February 8, 2013 at 3:30pm

I'm confused....has the 2nd given approval or no???

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