If a lender has to approve a short sale and another lender has to lend for a buyer to BUY a short sale then why are the 2 so often at odds?

Asked by David Rosen, New York, NY Tue Sep 21, 2010

If a lender has to approve a short sale and another lender has to lend for a buyer to BUY a short sale - and in many cases the lender is Fannie Mae or Freddie Mac or FHA (50% are Feddie / Fannie, not sure what portion is FHA) AND the US Taxpayer OWNS all these entities -

Then WHY are HAFA deals routinely denied?
and WHY are there discrepancies in Appraised values of homes (maximum amount buyer's mortgagee will lend) and BPO price (minimum amount Short Sale Lender will accept) ?

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Loren Hoboy’s answer
Loren Hoboy, Agent, Phoenix, AZ
Tue Sep 21, 2010
I recently attended a short sale webinar by B of A. It turns out that B of A represents 542 "investors" each with veto power over their own short sale. So in this case it was explained that B of A may think/recommend the investor should take the offer that B of A has put together, but the investor is under no obligation to accept.

The answer would appear to be the two respective lenders have different financial objectives. And as we all know too well, logic does not seem to one of the elements in the equations.

Loren
www-arizona-dream-homes.com
1 vote
Charles (Chu…, Agent, Scottsdale, AZ
Tue Sep 21, 2010
BEST ANSWER
David, I think some of the answers may be obvious, eg...the short sale lender is making decisions based upon a $45 drive-by BPO! The retail lender is getting a full appraisal report from a qualfied appraiser and paying $350...you get what you pay for!
1 vote
Laura Myers…, Agent, Scottsdale, AZ
Sat Sep 25, 2010
the short sale lender is approving a "loss" and the back end investor has final say if the servicing bank is not delegated (always ask this when working your short sale) so they act as "collectors" in their behavior and responses. On their mind is "how can we get the highest $", do our own evaluation, ie BPO. vs the lender for the buyer is interested in a "a" type loan to package back to investors to sell off once closed so they want to make sure value is not above market at all. That is the discrepancy that can be found here.

HAFA overvalues their homes prices for the same reason...collection attempts.

Every deal has a different chain of people involved and not all includes logic...we have our work cut out for us but it can be done. We just have to prepare what they don't know to get them to see the light.

Laura Myers
Keller Williams Arizona Realty
0 votes
David Rosen, Agent, New York, NY
Wed Sep 22, 2010
Wells Fargo says they represent literally thousand of investors in their loan servicing - 542 for Bank Of America (which also owns Countrywide's servicing) seems very light.
0 votes
Henry Gobel, Agent, Edgerton, WI
Tue Sep 21, 2010
HAFA deals may be denied for many reasons, we'd have to look at each case. Keep in mind that the financial situation of the seller is a big part of getting a HAFA deal to go through.

Regarding the value discrepencies, this is absolutely normal. Just like a regular buyer and a regular seller haggling over price with counter offers. Now, the buyer's lender, and the seller's lender are playing the roles. The value of a property is not a thing that is cast-in-stone, black-and-white, it is just an "opinion of value".
Web Reference:  http://www.TheGobelTeam.com
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