FHA SHORTSALE? OWNER MUST RESIDE IN HOUSE?
Trying to do an FHA shortsale. The Lender CountryWide is giving me a hassle because the borrower moved out of the house. I read the FHA guidelines, its not required that the borrower lives in the property for a short pay. However it is required for a WO program. Also, they are asking for current utility bills for proof. And they are asking for a MLS Listing agreement.
My question is, is there any around this? Does anyone have any experience particulaly with Countrywide on this?
I had already sent in the short sale package and Countrywide denied it due to the fact that the borrower had moved out and that the utilities were turned off.
I explained that the borrower moved to an apartment thinking the lender was going to take possession within days ( a common misconception) Any help greatly appreciated
As you know, FHA provides insurance in favor of the mortgagee against mortgagor default. In order for the mortgagee to be paid on their claim to FHA, they must adhere to strict FHA loan servicing requirements. Good thing you haven't spent a lot of time on this....
Hi pcglobal,
Although I have never seen it in written form, every FHA short that I have tried has been denied if the property was vacant.
I have taken this as a 'given' and this is one of the first questions that I ask an FHA candidate when I am trying to qualify them. There is lots more properties out there though, so go get yourself another opportunity!
Best of Success!
BAMZ
what is an FHA "shortsale"?
thnaks
Let me add one thing here I have dealt with Countrywide .........I would avoid them and look at the better lenders for short sales Wash Mutual is one of them I think they would short sale thier wifes baby and mother!!!
There are some other good ones also.
Also forget about FHA reg most do not follow them I know for I use to fax the lenders the FHA regs and they always said.....
Oh my really I did not know..........
Also the lenders just want their money with NO PROBLEMS period.
SKI
"Also forget about FHA reg most do not follow them"
Really? I've been involved in hundreds upon hundreds of shorts... many involving FHA insured loans. I've never experienced a mortgage loan servicer disregarding or ignoring FHA criteria... primarily because by their not following FHA criteria... their claim for recovery is invalidated.
So, please share with the readers your experiences in which FHA criteria has been ignored, and under what conditions this occured. Could be a valuable tool....
I'm currently working on an FHA short when I found out about the whole ownen-must-be-in-the-house deal. We had her throw a mattress and some papers in the house and continue to pay the utilities.
ROFL!!!!! alubeck...that is definitely using what you got! I can't stop laughing when I saw your post to this..."throw a matress and some papers and pay for the utilities..." does this really work?!? I definitely gotta commend you on that one b/c it's truly creative real estate investing at its best !
Please help me out though because I'm a newbie and have only had to deal with HUD and really haven't come across FHA...what's the deal with FHA???
Thanx all...
Teli
HUD will own the property if the FHA forecloses and takes it back.
Having a mattress on the floor is cute... but will it suffice? You must know that upon default, each month the FHA servicer sends it's field rep to ascertain the property's condition, and occupancy...
And snaps a picture. The preliminary drive-bys become more comprehensive if the loan is foreclosed. It's their required due diligence. The results of the 'neighbor contact' might contradict the appearance of a mattress on the floor. "No, they moved out last month....."
The appraiser or Broker who performs the BPO will also report on the occupancy status... so make sure the heat or A/C is on, food in the fridge, phone is on, cable is on, etc.
I also assume you would facilitating the owners ability to perpetuate a fraud by having the homeowner "throw a mattress" to make it look as though she is living there. you sure that $15-20K you might make on the deal is worth possibly spending some time in the pokey?
I think I got lucky. The last short I did was FHA. The lender knew the sellers had moved out and nothing was mentioned. Of course I tried to breeze over it as well. When they asked about a listing agreement, I told them we just went ahead and signed a purchase contract to speed the sellers "getting back on their feet." However, the lender paid very close attention the every other FHA requirement.
Also, another FHA short I tried in the past was incredibly different. The lender would not budge on ANYTHING!!!!!!! and it went to auction.
You got me?????????