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Does anyone have experience with this program? I'd like to hear any stories. Thank you!
Doing a HAFA Cooperative Short Sale now with BoA. They gave us an approved price that is about 30K too high and I have had little traffic on the house. I tried talking to them but I think I got an idiot the 1 time I called (you will see mixed results on the reps, some are great and some are bad) and was told maybe the program was not for me. So I am just waiting out my 120 days until we do a deed-in-lieu-of foreclosure.
Thanks for the reply. It sounds less than ideal. If you don't mind sharing, are you in default with your payments? We are not, and have heard that they generally won't approve someone who is not in default.
Thanks for the reply. It sounds less than ideal. If you don't mind sharing, are you in default with your payments? We are not, and have heard that they generally won't approve someone who is not in default.
100% current with my payments, have never been late in the 5 years I have had the loan. HAFA use to have a 31% income/mortgage ratio to qualify but they removed that. People who need to sell but were underwater, like me, but did not qualify would just walk away. So by doing a co-operative short sale they get a homeowner who will care for the property for the time to it takes to sell/ go back to the bank vs someone who will sit in it for 2 or 3 years with no upkeep.
The program works for me because at the end of the 120 days I give it back to the bank and walk. So if they want to set an high price that is their choice. I feel bad for my agent as I think she knows it will not sell. She has a good relationship with BOA but they are not willing to talk about price in my case.
I read about how its really no different to let them foreclose and live rent/mortgage free for 2 years but I am moving for a job (no relocation benefits), don't want 2 years of late payments on my credit, and want to put this behind us as soon as we can.
100% current with my payments, have never been late in the 5 years I have had the loan. HAFA use to have a 31% income/mortgage ratio to qualify but they removed that. People who need to sell but were underwater, like me, but did not qualify would just walk away. So by doing a co-operative short sale they get a homeowner who will care for the property for the time to it takes to sell/ go back to the bank vs someone who will sit in it for 2 or 3 years with no upkeep.
The program works for me because at the end of the 120 days I give it back to the bank and walk. So if they want to set an high price that is their choice. I feel bad for my agent as I think she knows it will not sell. She has a good relationship with BOA but they are not willing to talk about price in my case.
I read about how its really no different to let them foreclose and live rent/mortgage free for 2 years but I am moving for a job (no relocation benefits), don't want 2 years of late payments on my credit, and want to put this behind us as soon as we can.
Well that is promising. We are in a similar situation. Never been late on a payment, but need to move for a job. Underwater on our mortgage with no way out in the foreseeable future. We don't want to ruin our credit, and are willing to negotiate some kind of payoff if the terms are reasonable. The automatic deed in lieu is part of the appeal of the coop program for us. At least we would have a definite way out from under this house. Thanks for sharing, and best of luck to you.
Just some food for thought...have you thought of renting the home instead of letting it go back to the bank? Even if someone is paying the majority of the mortgage for you, would this not seem better than deed in lieu which is consider a default and/or foreclosure and some additional information for you who decided to deed in lieu...
A foreclosure is a public record. So is a bankruptcy filing. So is a judgment. And a tax lien for IRS or sometimes state income tax. Property tax delinquencies are generally not reported, nor are business debts and mortgages for investment properties. A deed in lieu of foreclosure affects your credit score because the mortgage company reports it, usually as a foreclosure. Deed in lieu drops your credit score like a foreclosure drops your credit score. Of course, there are things you can do. One is you can negotiate with your mortgage company when you are negotiating the deed in lieu. The negotiations are in two areas, how they report the deed in lieu to the credit reporting companies, and how any deficiency is handled. The best reporting that your mortgage company can make is "PAID - SATISFACTORY" about your loan. Even a "PAID - SETTLEMENT" isn't too bad compared to foreclosure. There is also a little known option called unrated, non rated or R0. It can actually help your credit and it is not a lie. The mortgage company can report you as R0 and you can do your deed in lieu. Make sure you get a written agreement that the mortgage company will not go after you for any of their financial losses. You can get a deed in lieu and buy another house if you do it this way.
In addition, many banks opt for foreclosure because it clears the title to the property of all secondary liens, mechanic leins and UCC liens, which gives clear title to the mortgage holder and potiential future buyer. Deed in lieu might sound like a viable option but it needs to discussed in detail with the lender. It is not an easy opt out of a home that is underwater.
Last edited by DawnYurkas; 04-25-2011 at 06:11 AM..
Reason: add
Just some food for thought...have you thought of renting the home instead of letting it go back to the bank? Even if someone is paying the majority of the mortgage for you, would this not seem better than deed in lieu which is consider a default and/or foreclosure and some additional information for you who decided to deed in lieu...
A foreclosure is a public record. So is a bankruptcy filing. So is a judgment. And a tax lien for IRS or sometimes state income tax. Property tax delinquencies are generally not reported, nor are business debts and mortgages for investment properties. A deed in lieu of foreclosure affects your credit score because the mortgage company reports it, usually as a foreclosure. Deed in lieu drops your credit score like a foreclosure drops your credit score. Of course, there are things you can do. One is you can negotiate with your mortgage company when you are negotiating the deed in lieu. The negotiations are in two areas, how they report the deed in lieu to the credit reporting companies, and how any deficiency is handled. The best reporting that your mortgage company can make is "PAID - SATISFACTORY" about your loan. Even a "PAID - SETTLEMENT" isn't too bad compared to foreclosure. There is also a little known option called unrated, non rated or R0. It can actually help your credit and it is not a lie. The mortgage company can report you as R0 and you can do your deed in lieu. Make sure you get a written agreement that the mortgage company will not go after you for any of their financial losses. You can get a deed in lieu and buy another house if you do it this way.
In addition, many banks opt for foreclosure because it clears the title to the property of all secondary liens, mechanic leins and UCC liens, which gives clear title to the mortgage holder and potiential future buyer. Deed in lieu might sound like a viable option but it needs to discussed in detail with the lender. It is not an easy opt out of a home that is underwater.
Thanks Dawn for the good advice. Regarding deed in lieu, what are the changes of the mortgage company agreeing to your request to negotiate of how they report to the credit reporting companies? Will they actually negotiate with you? I thought the bank was in complete control with the deed in lieu process. Any advice you can give to help with this would be much appreciated. Thank you.
Thanks for the reply DawnYurkas. I really appreciate all the information about negotiating what is reported to the credit agencies.
We did explore renting the property, but it is not feasible for many reasons. First, there is not a huge market looking to rent in our neighborhood. Second, we researched rents on comparable properties, and we would still be at a significant deficit every month. That's just from the mortgage, insurance, and taxes. It doesn't include repairs, maintenance, and everything else that goes with having tenants. Plus we will be moving to another state, which complicates things further. We really do not want to try to deal with a rental property from a thousand miles away. We could use a property management company, but there goes more money every month. We do realize the full implication of a deed in lieu. It's an unfortunate situation .
Days64, I would suggest talking to someone who does credit repair, these are people who most likely deal with these issues. Negoitating with the bank would probably have to be done via you or an designated agent to represent your interests on how the deed in lieu is reported.
Marmom...it is unfortunate. As an agent I have tried to sell underwater homes, it is very difficult until you get the short sale approval. Appraisals are excellent weapons to use with banks in obtaining short sale approvals. Have you had your home appraised as to what a fair market value would be?
DawnYurkas, No - we haven't had an appraisal done, but that is an excellent idea. We would much rather sell the house in a short sale if we can (rather than deed in lieu). However it obviously has to be priced correctly. Thanks again for your valuable insights.
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