All Forum Posts by: Minna Reid

You're right I overlooked that part. OP's only option is to short sell or foreclose. The lender wont approve a DIL wihout OP trying a short sale anyway. 

Threats of suing are baseless, as no one sues people without money. What would be the point. Just ignore these threats and move forward.

With a foreclosure auction less than 2 months way, its time to just start the short sale process now with Pennymac. FHA does not even require a buyer in order to start approving your for the PFS ( Preforeclosure sale program). Start now - call them and tell them you want to short sell. It's one packet, and they will have an appraisal. Once approved they will put the foreclosure on hold for a bit - 4 months minimum to be exact which will give you plenty of time to find a buyer (the existing one, or a new one), and get the sale closed. Extensions are likely granted, if needed.

You will receive $3k relocation assistance at the end ( unless you have other liens, back due water/sewer/HOA etc. ) You can also stay in the home until the sale closes, which gives you at least a few months payment free to be able to figure out where you will relocate.

 They cant approve your short sale because there is no sale to approve. Find yourself a real estate agent that understands short sales ASAP, list the house at a price it will sell, find a buyer and go under contract subject to the short sale approval. Then approach your lender with the short sale.  You are going to need help as you do not know what you are doing. An experienced short sale agent near you can handle all this for you.Find one today.  Feel free to PM if you need help finding one. 

Yes this happens. Especially in volatile markets like this one. 

Have you considered the possibility of a short sale? Lenders get more open minded to workouts once they are no longer getting paid, btw. 

I have worked with PHH and reverse, can't recall if together ever, but it doesn't matter who the servicer is. All FHA loan products are serviced to the same guidelines.

Sometimes they take issue with buyers paying, sometimes not. Usually you just have to play around with the HUD a little bit to have it work out if necessary. Ultimately though I have been able to get it done every time.

How much is the second? 

If it is for a short sale, the lender is using service link to validate the sales price. If you do bid online, the sale will still be subject to short sale approval.

HUD also allows the seller to receive a $3,000 relocation incentive which can be used to pay the junior, and there have been times where I have had the buyer contribute towards junior liens.

I handle a ton of sales with HUD partial claims. Over the last 4 years they have been giving out these claims like candy to make their Covid workouts possible, and sellers are always surprised at the amounts owed. You can never get the partial claim reduced or forgiven. They must be paid in full.

You have two options: Pay the partial claim off out of pocket or do a short sale. In a short sale with a partial claim, your first lien position with the FHA loan takes the loss so the claim can be paid in full. Currently FHA is offering no doc short sales through 4/2025, so you wont even have to provide any financials to get your short sale approved. Just a standard borrower hardship form. Pennymac is one of the better lenders to work short sales with right now. I have done a few FHA shorts with Pennymac over the last year, and you are looking at maybe a month or two from application to approval, if the person handling the sale knows what they are doing.

However, you would have to rework your current contract to be subject to SS approval  (which the buyer may or may not be into),or sell to another party, and if you are getting financing for the new house, that will likely fall apart as well. 

If you have the cash to complete the transaction as is, I would recommend simply paying the balance. 

No short sale is getting approved without being listed, so there should be an agent involved already. You should have your own. That person is best to guide you with the offer, but if you have a general question I'm happy to help. I've been specializing in foreclosures/short sales for 17 years  and have closed hundreds. Feel free to ask here or PM.

You need a short sale approval letter from the first addressing this particular sale, and if the second has agreed to move their lien, they should be providing a lien release letter, or a letter stating they will be releasing the lien at close. 

Until the foreclosure is complete, the owner is the only person who can sell this property to you. 

There is really not much difference between buying a pre-foreclosure vs any other property. The only difference is the seller is behind on payments, which is irrelevant if the sale covers all the debt and can occur before the foreclosure sale date.