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Fighting HUD in an FHA Short Sale
It’s sort of surprising in a way but many home buyers in Sacramento do not know what kind of loan they have, especially after a few years pass since closing. From their point of view, it doesn’t matter. They still owe all of that money for decades. Whether their loan was FHA or conventional or VA, who cares? But it makes a difference if the seller needs to do a short sale. The rules are very different.
Whenever this Sacramento real estate agent approaches a short sale, the very first thing I do is figure out the seller’s type of loan. If the loan is FHA, for example, there is no requirement to submit an offer with the FHA short sale request. That doesn’t mean a seller might not want to submit an offer, as there are reasons for it, providing the buyer is willing to wait, but it’s not a requirement and, in some situations, it can be a much easier process without an offer.
We had a short sale recently that could not close. It was the first short sale in a long, long time that had been rejected without hope of any further action. Ordinarily, I do not give up; I continue the fight and, if the bank says no, I reconfigure the short sale package and resubmit. Eventually, the banks say yes. But when HUD says no, it means no. To protest would mean fighting the department of Housing and Urban Development.
One can request a variance and build a very strong case. But after that case is presented, it’s sort of like getting an opinion from Superior Court. One could appeal but an agent can’t do it. It takes a lawyer to do it at that level.
Sometimes, clients forget that Sacramento real estate agents are not lawyers. We might seem that way, but we do not have a law degree, we cannot give legal advice, and we cannot practice law, even if our shoes are nicer.
In this particular situation, even though the home was not habitable, HUD rejected a variance request. This was a round peg trying to fit into a square hole. Apparently, there is nothing in HUD guidelines that deal with homes that are uninhabitable. Because the bottom line is when you’ve got Lily Tomlin in her telephone operator role running HUD, the answer tends to be no, especially when they can’t figure it out.
Get Your Short Sale Package Upon Initiation
Did you miss the earthquake drill yesterday? We were sitting in the doctor’s office waiting room when 10:18 had come and gone. Darn it. But then, until my husband told me about the earthquake drill, I had not heard about it. That’s because I don’t hang out on social websites during the day. Nope, this little hamster on the hamster wheel is busy wheeling and dealing in short sales and Sacramento real estate. Nose to the grindstone and all of that.
Still, I managed to miss observing the drill. Because if I had known about it, I would have wanted to observe. Certainly, nobody in the doctor’s office was doing a duck-and-cover. You’ve got to ask yourself, though, did anybody really believe that diving under your desk with your hands over your head would protect you against a bomb? A nuclear bomb? No, in the 1950s, you just did what you were told and you didn’t question it. It’s life experiences like this, the duck-and-cover, that has prepared me for my career-turn to a Sacramento short sale agent. It takes a special kind of person, I’m convinced.
Take a short sale package, for example. Way back in the early years of short sales, like 2007, I used to hand out short sale packages in advance to my clients. Sometimes, I would email the packages. Mostly these were financial P&Ls like a 710. Today, we have a ton of options at our disposal, but I don’t routinely send out a short sale package before we open the short sale file. The reason I don’t is because I don’t want my sellers to do any more work than they have to do. I want to limit the pain.
Not only do the requirements change from day to day, but the forms change, too. There is a short sale in Lincoln that I’ve sold 4 times now. The first 3 packages did not include this particular financial, but the present sale does. You may wonder why did Wells Fargo not require this and now it does? Legal crap. Sometimes, it’s one word in a document that changes.
It’s not just a Wells Fargo short sale in which the required forms and documents can morph. Bank of America has changed its third party authorization more times than I can count. I’ve run out of fingers and toes. So, when I don’t give you a short sale package in advance to complete, it’s not because I’m failing to be proactive or shirking my duty. It’s because I don’t want you to have to fill out one package and then be told you need to complete a different package. Especially those arm’s length affidavits that require a notary. I’m trying to save you time and agony. Because heaven knows there is enough agony in a short sale as it is.
