Oct 21, 2013

Tip 33-2013: Short Sales & Government-Backed Loans

Loans backed by the government (i.e. FHA loans or Ginne Mae loans among other investors) have specific requirements that must be met in order for the servicer to process and review a short sale application. There is a recent trend where homeowners with government-backed loans are required to exhaust all other work out options before applying for a short sale. This trend was recently confirmed during a recent Bank of America Webinar in which the speaker stated that a "homeowner cannot proceed with an FHA short sale if they opt out of modification assistance in order to proceed to short sale." 

Accordingly, Tucker's Tip advises that homeowners with government-backed loans who are considering a short sale apply for a loan modification first. Even if the homeowner does not qualify for a loan modification or want a loan modification, this requirement must still be satisfied. That way, the short sale negotiator can submit a loan modification denial letter along with the request to open the short sale file. 

Short sales are already long and drawn out. Hopefully this Tucker's Tip will assist in getting the short sale process started sooner. 

P.S. As we learn of new issues with short sales, Tucker's Tip will share this information with you!  

Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions, or visit our blog below for previous tips.  Thank you for allowing us to send you this email.                 

William D. Tucker, III
Charlottesville, VA 434-973-7474 | Lake Monticello (Palmyra, VA) 434-589-3636       

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