Bank of America Short sale success in Danbury, CT with PMI.

When I first met with these new clients, they had had enough and just wanted out of their condo. Finding themselves severely upside down and unhappy with their homeowners association, they called me.

We listed the property in the slow season ( November ) but were able to locate a solid buyer within 4 months. Once we has all documents submitted in to Bank of America, the PMI company declined the client out of HAFA. This is a VERY common occurence. Many of my clients are lured into HAFA by the " promise " of a $3,000 relocation incentive, but the problem is, many are declined out of the program because A) The mortgage insurance company will almost require some kind of contribution, and B) Their particular investor may not be willing to waive the deficiency. In order to qualify for HAFA, all parties must agree to settlement and deficiency waiver on all acccounts. This RARELY happens when a PMI company is involved, as the PMI company almost always requires a contribution to the homeowner in order to offset some of the losses it will incur from the short sale mortgage insurance claim.

In this instance, the PMI company demanded either a $6,000 cash contribution, or a $12,000 promissory note from the seller. Luckily, the seller was able to borrow the money to make the cash contribution, and put this chapter in their lives to rest with a full deficiency waiver from the investor on the loan, which was Wells Fargo .

Here are the numbers:

Sale price- $102,000

Allowed closing costs - $8,000

Amount owed 1st mortgage with Bank of America: - $190,000

Cash contribution from homeowner - $6,000

Net to 1st mortgage serviced by Bank of America with Wells Fargo as investor- $100,000

Total deficiency waived and debt FORGIVEN - $84,000

The $6,000 cash contribution was well worth the deficiency release from the remaining $84,000 shortfall.

Patrick