This was an FHA loan and therefore would be governed by FHA’s Short Sale Guidelines. This means that the lender must follow FHA’s Specific Instructions on how to handle the short sale. Here’s what happened. Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
FHA sends all of the lenders who handle their loans a letter called “Mortgagee Letter 2008-43.” It details exactly how the banks servicing an FHA loan are supposed to negotiate on a short sale.
This letter is 16 pages long and gives them specific directions on how much to pay agents, what percentage of the appraisal they can accept, etc.
We had had a wretched experience another FHA short sale. The lender lied to the seller’s prior agent and hadn’t followed the FHA Short Sale Guidelines. Because of that experience, we had read thru this letter 2-3 times.
Bottom line, we know a little bit about FHA’s rules for short sales. The problem was this negotiator at a large national bank didn’t want to follow the rules!
Instead she made up her own rules! She told us that the buyer and seller had to split the cost of the title insurance. The problem is on page 12 of the Mortgage Letter, it says that they are allowed to approve a file paying the standard title insurance costs.
In our area, it is the sale’s contracts are written with the seller paying for the title insurance. The buyer pays their closing costs and the title insurance for their lender.
But, this negotiator didn’t want to allow that. I had to argue back and forth with her for 2-3 days until she finally relented. FHA is insuring this lender against any and all loss on the loan.
They have given that lender an almost risk free way to make a decent profit on a mortgage. If they have given you specific instructions on how to negotiate a short sale, then follow those instructions!
Here is the bottom line. If the negotiator at the lender is lying to you, then ask for their manager. When you talk to their manager, explain how they are breaking the rules.
Tell them you may contact FHA and tell them that the lender is breaking the rules. Thinking about a short sale?
I can help you short sale your property and get back on your feet. Send me an e-mail at firstname.lastname@example.org. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (919) 606-8751
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Raleigh loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this, Ken Smith.
Ken is a Real Estate Broker at Goldens Realty. Raleigh Short Sales Realtor:
Phone: (919) 606-8751. email@example.com.
Friendly, loyal, intelligent service!
View My homes for sale at www.GoldensRealty.com.
Ken Smith specializes in loan modification assistance and short sales in Raleigh North Carolina. Raleigh Loan Modification Help, Raleigh Short Sales. Raleigh Short Sale Realtor. Raleigh NC Short Sales. Raleigh Realtor.
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