FHA Short Sale - Vacant House: HELP ! ! !
I need to know if this deal is dead or if there is ANY hope . . . appreciate any "creative" input from experienced short sellers!
I have been working with the first and second lenders, and they have been cooperative. The first even complimented me on my SS package! The second is agreeing to release their lein, and the deal is "all but done".
BUT... the homeowner got scared that they were going to lock her out of her house and moved everything out. She still went over to the house every day to check on it, and recently she went by and discovered that the house had been "locked down": the doors had been bolted shut and a notice was left on the door that the house had been 'found vacant'.
I played 'dumb' in future conversations with the first lender (didn't tell them it isn't vacant, I just said I didn't think so when they asked if it is vacant.
It seemed like the first lender was just waiting for the second lender to send a letter of intent to release the second lien on the property (which they have agreed to do) so they could schedule a closing.
Today, I got a phone call from an appraiser, wanting to schedule an appointment to come by and appraise the property for the bank. They asked if the house is vacant - again, "I don't think so," and then said I can fax some comps over to them if I have any that I want them to use. I plan to send the same comps I sent to the first lender in the SS package.
So finally - my question. I know that banks typically won't do a SS on FHA loans when the property is vacant; is there any hope of me saving this deal? If anyone knows of things I can do to get this deal closed, I would really appreciate it. I don't know who 'locked down' the house, but one thought I had is if it was the city / county, perhaps I could get the homeowner to make an appeal to them and get back into the house before the appraisal. Any thoughts? Thanks!
If the reason that the homeowner vacated was financial (job relocation, couldn't afford to fiil the fuel oil tank, couldn't afford to repair the furnace (no heat), utilities shut down, or otherwise uninhabitable, etc...) the FHA might waive the owner occupancy requirement.
The last thing you need is to be caught in a lie. Play the cards you are dealt.[ Edited by TheShortSalePro on Date 01/24/2004 ]
I'm not trying to lie to anyone, but I did play "dumb" while trying to see what my options are (on the advice of another senior investor in this forum) . . . the reason the homeowner moved out is because a representative of the mortgage company threatened to lock her out of her home and leave her in the street, calling her a few "choice names" in the process. I could not convince her to move back in, and the house was subsequently "locked down" by someone. Who actually secures vacant properties - the city? the county? Any insight is appreciated.
It seems to me that such threats are immoral, if not illegal. I know that by law they cannot do what they threatened to do, but I still need advice on how to address this vacancy issue while dealing with the lender. I still don't know who locked the house up at this point, because the lender doesn't seem to know it's a vacant property. So, I'm wondering if there is any way the homeowner can legally regain access to the property and move back in. One thought is, if the city secured the 'vacant' property she could talk to someone with the city and get back into the house.
Again, I'm not trying to lie to anyone, I'm simply trying to understand what our options are at this point. Thanks.
Mortgage loan servicers are complex organizations, oftentimes one hand knows not what the other is doing.
It's reasonable to think that a collection rep, or customer service rep would not know that the home has been secured.
Usually, when a loan is in default/foreclosure, the mortgagee will order a series of drive-bys, and BPO's.
If the report comes back as, VACANT, they click a button and a field service order is placed to winterize/secure a vacant property.
If the mortgagor signs a statement that the servicer made 'terroristic' threats... I'd bet that the FHA would waive the occupancy criteria... and investigate the servicer's conduct.
If you need some help on this one, I'd be interested.
It seems like the challenge in this case will be getting the FHA to waive the occupancy criteria without hurting the relationship with the lender - causing them to not accept my offer. It seems like a delicate balance!
Storm
[ Edited by Storm33 on Date 02/07/2004 ][ Edited by Storm33 on Date 02/07/2004 ]
So far, the lender has ordered the title work and an FHA appraisal - and at this point, I confirmed that they know the house is vacant. Kind of puzzling, but I'm going to 'go with the flow' and see what happens next.
I met the appraiser at the house yesterday, and it seems like all he does for the FHA inspection is verify that the house is inhabitable in its present condition. I politely tried to point out some problems to him, but he stated that by FHA standards they weren't an issue.
It also became apparent he was looking for some "consideration", but I was as subtle in declining to pay as he was in hinting around about it. This deal just gets more and more interesting. Like you have said before, SSPro, if the deal falls through, I will have paid my tuition and gained a lot of knowledge from this one!
Storm