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HUD - They would rather foreclose!!!!!

Just got my first short sale denial letter and from nowhere other than HUD! The lack of common sense is so unbelivable!!!!!
Client lived in the home for many years before job relocation left him with no choice but to move. At the time he tried it all, first to sell, then refinance (a few times) to no success so he had to put the home for rent.

Things got more complicated by the birth of his second child at the same time the tenant left the rental.
Being a responsible person he contacted his mortgage company (Wells Fargo) who told him both over the phone and in writing that he should pursue a short sale.

So he contacted my, we listed, secured a well qualified buyer (all cash offer for property's current market value) and package goes to the lender.

I have followed up every week on how the process is going with no news until yesterday when the client called me saying he received a letter from Wells Fargo stating the investor denied the short sale.
So today I get on the phone first with Wells Fargo who told me the reason the short sale was denied is because the home was "rented too long" and then transferred me to HUD.

HUD tells me that there is absolutely no exceptions and the seller has to do a deed -in - lieu or just let the home foreclose. The guidelines do not allow for any rentals, which he followed by saying the maximum amount a time a home can be rented is 18 months, (you read it right, rentals are NOT allowed but they are allowed for 18 months). To which I said "that doesn't even make any sense?!?!?!?!?!?" I told the HUD employee that it the most absurd thing I have EVER heard! The Federal Government is intentionally putting a home into foreclosure, destroying the seller's life and doing it with no care at all.
The client is talking to HUD.. Client is baffled! He told me "Patty, I did everything right and now I am being punished for being honest!".

I thought the government wanted to help.... it sure does not seem like that to me.

Help lots of people and have a great day!

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®, GREEN, CFS
BROKER - Owner REALTOR® - Green Realty Properties

Visit www.pattydasilva.com for SouthEast Florida's best properties.

Posted by Patty DaSilva, CDPE©- Certified Short Sale Expert- e-PRO®- Ft Lauderdale on 03/13/2009 01:31 PM

Comments (10)

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10 Comments on HUD - They would rather foreclose!!!!!

MAR

Patty, the sad thing is these are the same regulations and rules that could come into play when or if the Government takes over health care. The IRS is an example of one department doesn't have aclue of what the other department is doing. and doesn't really care either.

The whacked out and whacky rules are aplenty in government double talk. If you had the resources to read all the junk that is cataloged i would not be surprised if you couldnt find away around this snafu.

In the meantime, real people are having real life crisies and we get more double talk. There is no reason, no common sense involved. It makes me ill to think of all of us at the mercy of some obscure rule somewhere.

This does not come as a surprise to me. I have several friends who are in the process of trying to save their homes and the mortgage companies could really care less about helping with them keeping the properties. Both of the ones I speak of have lost jobs and until then they kept their payments up on time. It has been 3 months for each and they are struggling. The situation you speak of with the rules written one way, and the office of HUD going another way seems to be not that uncommon. I have had shown homes that are short sales and everyone I have sent to them has been told they could not qualify or they would have to wait a month or more to get an answer, and recently I had one customer call me back and said their mortgage company told them not to even try for a foreclosure, short sale or HUD as they would be chasing the wind. I even had one tell me that for every one loan that passes through, two more get foreclosed on and he was wasting his time trying to even buy in this market. Makes one wonder how many homes will be sitting empty by the end of this year?

Hi Gail,

Double talk, that is right. One arm does not know what the other arm is doing.

I am sure all the time, and all the money, in the world could find a few loopholes to this ridiculous decision.

The client does not have either the time, the knowledge or the money to fight with the Federal Gov. I am sure an attorney experienced in the field could get the decision reversed. But attorneys who practice in Federal Court are not cheap and the seller is in distress and cannot afford such luxury so he is at the mercy of some government employee who has no discretion to do the right thing.. FOR ALL INVOLVED.

The LAST thing HUD needs is ANOTHER TOTALLY PREVENTABLE FORECLOSURE!

Help lots of people and have a great day!!!

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®

Patty... the sad thing I take away from this conversation is you would be better off (as an owner) to lie to the mortgage company (if you have to rent) or just walk away after buying the replacement property, there was no need to attempt to be honest or ever make two mortgage payments because you get the same results but sooner.

The attitudes of many banks just blows me away. I have a contract offer on a bank foreclosure property, the bank has had the contract for 4 weeks before I got a counter offer, we countered back over a week ago and now the property has expired. So, now what? We're less than $10K apart.

When should someone run? When they hear "I'm from the government and I'm here to help"!

Brian.

Steve,

How sad it that! We are now promoting lies as a mean of getting results.

My head is going to explode.. I just cannot accept that as a way of doing business or living.

There has to be a better way. I teach my children the punishment will be quadrupled if I find out they are lying... shouldn't we all practice what we preach?

The federal government must do something and not just "talk about it".

Help lots of people and have a great day!!!

Brian, I wish we could run! But the government holds all the cards.. What now?

June, I agree with you.. dealing with some banks on foreclosures is worse than pulling teeth.

They just cannot make up their mind in what they want to do with the property. It requires a lot of patience on the part of the buyer(s).

Cathy, I guess it should not be surprising.. it sure is disappointing that the Housing of Urban Development wants to have another foreclosure when they have a CASH offer for the property RIGHT NOW.

OMG....good luck on this one. I stay clear of short sales, foreclosures and the like. You have to know that there isn't good news attached to these sales, if they go through. It's a lot to time and energy wasted usually and for short money.

Portsmouth NH Real Estate

It's just sad! I have a buyer who is trying to buy a short sale right now and it was approved by the local bank branch but needed to be approved higher up it's been 3 weeks and the listing agent and I are just hanging out...waiting. There is just no urgency by the bank... it does seem they want the property to foreclose!

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