All Forum Posts by: Minna Reid

FHA is currently running a streamline Covid 19 short sale program. Almost everyone qualifies for it via verbal statement alone, and there are no financial documents involved. There has literally never been an easier time to short an FHA loan. FHA fully forgives the remaining debt, and even gives you a $7500 relocation check (for owner occupants - not sure if you live in this or not). You will generally qualify for a new loan about 2-3 years after a short sale and credit recovery is very swift if the house is the only thing in default and you resolve it quickly.

Whether you overpaid it or not is your issue, not the appraisers so that is a dead end. I recommend dumping this loser via short sale ASAP before you throw more money down the drain. 

You wont be able to get anywhere without his signatures and the property will foreclose unless you can bring the loan current. Sadly I see this happen often in divorce situations - one partner just stiffs the other by not cooperating and forces everyone to foreclose out of spite. 

And this is why I never recommend subject to's. Borrower has all the risk, owner has none. 

Wow - another extension - you're right I just looked it up. Til Feb 2026 now. Just how long can they keep the free money handout going per "Covid relief"... the cold that keeps giving lololololol.

I actually have a client who's been wanting to list for almost two years now....but every time shes ready, they continue to extend these ridiculous programs. I guess she just got herself another year of the free ride. 

Quote from @Jay Hinrichs:

Quote from @Minna Reid:

I've been watching this happen for the last 5 years - most of the problems are with FHA. Homeowners - current or not - have been aggressively pushed into forbearances and loan mods for years now. Many homeowners haven't paid at all in years. The "workouts" have been financed by worthless HUD partial claims - silent seconds. HUD has written millions since covid. The problem is they

are all written on negative equity as these borrowers started with limited equity, and lost it all and then some, with so called "homeowner help programs" packed with principal deferments, back due payments, fees and interest.

They've been pushing back the inevitable fallout of this situation throughout the Biden years. Now the bills are due and the market is in decline. Its gonna be messy. Over the last few months I've picked up about 10 new short sales - 95% FHA with partial claims written though the last few years. And this is just the beginning. Hopefully shortsale process is not as painful as it was back in the GFC .. it was horrid then..

They are actually easier than ever right now. These lenders know what's going on. They took the government handouts to keep the people in the homes, knowing full well what it would lead to. They've been beefing up loss mit for years and (at least currently) have a bunch of easy streamline liquidation options.

Quote from @Jaron Walling:

@Jay Hinrichs "But it is a different ball game compared to GFC and pre GFC when lenders and servicers did not offer workouts like they do now." 

The question is how long does this hold out for owners getting into payment trouble? If we have a shift in the job market/unemployment maybe that stops the party. 

Endless, limitless, no documents required workout options have already been happening for 4-5 years. They've been created out of money that does not exist and won't - not without continuous aggressive home value appreciation and/or pledging of endless future taxpayer funds. 

Loan workouts have always existed - but have been mostly based on realistic outcomes - until the Biden years. 

It looks like we may be returning to  a more reasonable time now, which means less workouts, not more.

I've been watching this happen for the last 5 years - most of the problems are with FHA. Homeowners - current or not - have been aggressively pushed into forbearances and loan mods for years now. Many homeowners haven't paid at all in years. The "workouts" have been financed by worthless HUD partial claims - silent seconds. HUD has written millions since covid. The problem is they are all written on negative equity as these borrowers started with limited equity, and lost it all and then some, with so called "homeowner help programs" packed with principal deferments, back due payments, fees and interest.

They've been pushing back the inevitable fallout of this situation throughout the Biden years. Now the bills are due and the market is in decline. Its gonna be messy. Over the last few months I've picked up about 10 new short sales - 95% FHA with partial claims written though the last few years. And this is just the beginning. It's time to pay the piper.

As part of the short sale approval process for 99% of all short sales, the lender will ask all the parties (buyer, seller, agents, title/attorney) to sign an arms length affidavit which usually has a clause preventing exactly this. By signing the form and then doing this everyone involved would be committing fraud. 

Your agent probably isn't experienced in short sales to not know this. 

In fact most people in general wouldn't know this.

This form will come at the end of the approval process which will take months to get to, so you can waste a lot of people's time  to get here and then not move forward, because there is a zero percent chance that everyone involved is willing to commit fraud so that you can lease your house back.

Short sellers need to be prepared to move away from their homes.

Been doing short sales for almost 20 years. Currently most investors Fannie/Freddie, FHA , VA, USDA and most portfolio notes allow up to 6% in RE agent commissions. How you break that up is up to you.

Seller concessions are limited by Investor - FHA allows 1% concessions, and only to FHA buyers, none to others. The others will usually allow 3% max.

Some investors won't allow the agent to also be the buyer or seller. Others wont pay if you are related.

Again - all short sale guidelines are investor specific. The big guys have regular guidelines to follow. The  portfolio stuff does not so they make the rules up as they go along, but those loans comprise less than 10% of all loans. Maybe even less than 5%

If you haven't already, respond to the foreclosure suit, and also try to get into mediation if you can (many states offer this). You may be declined for not being an owner occupant, but it will still buy a little more time. Uncontested foreclosures move faster.

Also - call the lender and apply for loan mod/forbearance etc. It should buy time, and avoid legal fees being added to the balance as the foreclosure attorneys wont be involved for a while as they process you for different workouts.