What lender programs offer cash to short sale sellers?
FANNIE MAE OR FREDDIE MAC conventional mortgages:
The seller may be entitled to an incentive payment of $3,000 from FNMA or Freddie upon successful closing of the short sale. These are cases where seller has an inability to sustain their mortgage payment due to financial hardship and is in serious default (91 days in default). Assistance availability is case by case and is determined during the short sale approval process. Owner occupancy is required for relocation assistance funds. With new Fannie Mae and Freddie Mac short sale guidelines, effective November 1, 2013, if seller is 91 days in default and has a credit score below 620, FNMA and Freddie Mac does not require seller to provide financial documentation to be considered for this short sale as the 91 day default status and credit score under 620 proves the financial hardship. This is commonly referred to in the industry as a no doc short sale.
BANK OF AMERICA COOPERATIVE SHORT SALE:
This program IS NOT available for Fannie Mae or Freddie Mac invested mortgages that are being serviced by BAC. The BAC Coop Short Sale is available on Bank of America owned loans and those of some private investors. The BAC Coop Short Sale provides $5,000 - $30,000 to eligible sellers at the closing of their short sale. Seller MUST BE pre-approved for the BAC Coop Short Sale before offer is submitted. If short sale is submitted with an offer prior to pre-approval for the program, seller is ineligible for BAC Coop SS. If status of the loan indicates it may be eligible for BAC Cooperative Short Sale, homeowner should contact MZ Law for consultation and we can confirm their eligibility and get their BAC Cooperative Short Sale pre-approved. Pre-approval process takes about 3-4 weeks. Once homeowner is pre-approved for the program, short sale approval is granted within 2-3 weeks of acceptable offer being submitted to BAC. Indicators that seller is likely eligible for BAC Coop SS (including but not limited to these indicators):a. Fannie Mae or Freddie Mac IS NOT the investor on the loanb. Loan must be non-performing (ie: loan is in serious default and/or has been bankrupted)c. Loan originated with Country Wide (not required, but likely eligible)d. Loan was a sub-prime loan, no doc loan, or interest only loan (not required but likely eligible)
CHASE COOPERATIVE SHORT SALE:
Similar to BAC Coop SS and offers up to $30,000 to short sale seller at closing. Not available on FNMA or Freddie Mac invested mortgages. Available on some Chase portfolio loans and loans with some private investors. Seller must be in serious default (ie: 60 days or more default). If homeowner is eligible for Chase Coop SS, Chase will send letter to homeowner requesting they consider a short sale and offering the incentive up to $30,000. If seller receives the letter, it is for real and sellers loan is eligible. If seller has not received the letter, they are likely not eligible. Homeowner considering a short sale can call Chase to find out if their loan is eligible for this program.
If sellers mortgage is FHA and they have no 2nd mortgage on the property, seller will receive $3000 in FHA short sale incentive. If there is a 2nd mortgage on the property, sellers incentive is used as part of the payment to the 2nd mortgage for release of lien. Also, if there are any fees due at closing not payable by sellers lender such as delinquent HOA dues, final water bill, etc., sellers FHA incentive can be used to pay those items required for clear to close. If sellers FHA incentive is not needed for 2nd lien release or other uncovered costs, the funds are for the seller to keep.
HAFA SHORT SALES:
The US Treasury Dept HAFA short sale is available now on limited basis through 2013. It is no longer available on FNMA or Freddie Mac invested loans, only on some conventional loans with private investors (ie: Non-Government Sponsor Exchange loans). HAFA short sales offer $3,000 in relocation assistance funds for homeowners.