It was like a trip to the dentist, McCue Mortgage short sale CLOSED!

Hopefully my dentist doesn't take offense to the title. Dr. Ted, you and your staff are first class, and make every trip to your office as easy and painless as a 1 lien GMAC short sale. If you ever need a dentist in Connecticut, I highly recommend Thaddeus S. Michalski DMD in Rocky Hill, CT.

FHA short sales as a whole are very predictable, and should not be rocket science for any lender. Well in this case it seems to be that way with McCue...rocket science short sales. There was some lack of knowledge on the negotiators part regarding closing costs ( easily overcome ), communication was difficult at times ( not the negotiators fault entirely, she's probably underpaid and overworked ), and then there were the major flaws in McCues policies and procedures that were just RIDICULOUS! ( Not easily overcome ). To sum it all up, it seems they are making this process WAY harder than what they need to. I also have 3 other active short sale files with them, and they were all assigned to the same short sale negotiator - another hint to me that they are understaffed.

We listed the property and had several offers within the first two weeks on the market. We had all of our client's documents in, and quickly pressed for appraisal, title and an approval. We got the appraisal and title work quickly, but then it took the negotiator nearly 60 days to generate the approval to participate, and approve the contract. It should not have taken anywhere near that long. Here's a categorized list of the problems we encountered along the way:

Negotiator lacks knowledge in some areas:

• FHA will approve variances in closing costs for specific items as long as we meet the minimum net. In this case it was past due water and sewer bills. I had to be VERY adamant about submitting a variance, and it was approved.
• Closing costs - we had to fight about getting costs on the allowed closing costs list approved. Shouldn't have to do that. In this case it was the seller's cost of title search. They also were adamant that a junior lienholder had to be paid a specific amount, HIGHER than what they had already agreed to release for.

Some of McCue's internal policies make no sense, and could land them in hot water legally if they continue.

• At first, they insisted on obtaining the release from the junior lienholder ( CHIF ). They were insistent that this is their policy. They did not understand that they are not a principal to the transaction. That their job is to approve or deny the deal they are presented. Not negotiate with other lienholders on the homeowners behalf. The homeowner has not given them that specific authority, and it was only when my client's attorney hinted at legal action if they were to continue down that path that they relented.
• They only wanted to speak with the attorney regarding closing cost changes, even though I was authorized on the account. Again, it was not until the attorney's office directed them to speak with me directly that they dropped that demand.
• Obtaining the final approval - they would not sign off and issue the HUD closing worksheet until they had a full HUD with all of the buyer's closing costs listed. This makes no sense AT ALL! The buyer's closing costs have no bearing on the approval or denial of the short sale. It's the seller's closing costs that matter, those are the only closing costs they have a right to approve. Regardless, they made us wait until an hour prior to the closing, when the buyer's closing costs were approved by their lender to issue final approval.
• On our final approval, they made us move the seller's attorney fee from line 1110 to line 1102. The entire 1100's section in the settlement statement is for title charges and settlement costs. In this case, they refused to issue the approval because when we submitted our preliminary HUD, the sellers attorney fee was on a different line that on the final HUD submitted for approval. The amount was the same and it was in the correct section of the HUD1. It makes no difference unless the numbers change! Not with McCue though. We were told, NO EXCEPTIONS! Luckily for us, the buyer attorney's software allowed them to generate a HUD with both attorney fees on the same line. Most do not.

SO after months of unecessary and painful deliberations, we were finally able to wrap this bad boy up and call it a day, with a full waiver of deficiency for our client.

Here's the details of the sale:

Sale Price: $137,500

Closing costs allowed: $14,000

Net to 1st mortgage with McCue / FHA - $125,000

Net to 2nd mortgage with CHIF - $1,500

Total amount owed - McCue - $185,000 , CHIF - $12,000

Deficiency forgiven - $70,500

Patrick