We sold our home through a short sale in Sept.  After submitting a complete packet (per their check sheet), we were informed we needed to send in the HUD from the purchase.  We did that.  After they received that form, we were e-mailed an additional form requesting whether or not we had to sign a promissary note for the deficiency amount with the bank and any forgiven amount.  I asked the contact if that information would affect the benefit amount using the formula previous provided on their website of:  (90% of purchase price - sales price) + closing costs = benefit amount.  Her reply was yes, that the answers on the form could affect the amount. 

My question is when did this "new" form become part of the required process?  If short sales are to be treated as a private sale, why is this information necessary? Does anyone know how this form's information is figured into the equation?  The contact wasn't able to tell me. 

Thanks!

Kelli

after doing a short sale this is how my benefits were computed. I still have not been Paid. I am awaiting a recorded deed and recorded closing from first and second mortgage.

Purchase Price
95% of Purchase Price
-Sale Price
- Debt Forgiveness from Wells Fargo
$ Property Benefit
+ Estimated Closing Costs Reimbursement
$ Estimated Total Benefit Payment

so, with a short sale, you get more in benefits than a private sale? with a private sale, we only get 90% of prior market value (purchase price)..... it seems everything else is the same but that you get 5% more on your original purchase price. doesn't this mean we'd be better getting a short sale than selling our home privately? i'm confused.

I read all of these and try to only make comment when I think I can add value and not further muddy the water on a very complicated process.  Here are my thoughts on a couple of questions posed in this dialogue. 

1.  I am guessing that the ACE is developing the process as they go so a "new form" popping up is probably a reaction to new circumstances coming up that the ACE couldn't predict.   Remember the acutal Congressional language was extremely vague and left them holding the bag.  

2.  Just to clarify, a short sale can have two different outcomes.  Based on the individual lien holder/s policies, the individual circumstances, and the amount of the deificiency, the lien holder/s  may or may not require a note to cover all of part of the deficiency.  If you have excellent income and / or assets and / or if the deficiency is substantial, they may not sign off on the short sale without you signing a note. 

On the other hand, if your income / assets are low, and they understand that you could file chapter 7 bankruptcy (which would offer certain debt protection) and allow foreclosure to proceed,  (caveat, I am not an attorney, consult qualified legal advice!!!) ,   they may conclude that their best option is to run with the short sale vs. a foreclosure and simply forgive the deficiency.   Foreclosure and / or bankruptcy are very serious matters with long term consequences and you should only consider them with the advice of competent legal counsel. 

3.  Finally, I dont' thing the 90% / 95% difference is tied to whether you are doing a short sale vs. a private sale as a short sale is indeed a form of private sale.  I believe it is a difference in which HAP program you are under and would defer to others who are more involved with the program.  Thoughts?  

 

Joe

 

 

 

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Sam

You are right on the difference between 90 and 95% I fall under BRAC instead of PCS. You have to be stationed at a BRAC installation on May 2005 to qualify.

Thanks for all of the input. If they start using the forgiveness amount, that's definitely going to hurt/disqualify more people. It's the difference of getting a chunk back of what we lost in our house, versus getting nothing. Since they've already been paying out, I wonder if those short-sales just got lucky? Certainly HAP wouldn't come back on those people and tell them to send money back per their new forms and criteria. We thought this program was going to help us, but it's looking like it's going to end up not doing a thing in our situation - just like so many others. Frustrating.

Is it true that in order to qualify for HAP for PCS orders you must have purchased your house before July 01, 2006? I don't understand why they have picked this date. Is there anyone out there that has just gone ahead and purchased their home after this date? And were approved? We bought our house and it appraised higher than what we paid. Now it is MUCH lower and we need to sell. I don't understand where Congress came up with this date. The lady working for HAP said that Congress just drew a line in the sand. I would appreciate any feedback.

Lindsey, unfortunately that is the case, except it does allow for you to have a signed purchase contract before July 1, 2006, even if you settled after that date.  See link below.  Also, for Wounded Warriors, that date does not apply.   We don't like that date either and have made every attempt to make our case with Congress through a letter writing campaign (see the home page for our site).   We encourage everyone to write, call, have their parents, siblings, friends, etc. to push their home state Congressmen to get this fixed.  

Know you don't want to hear this answer, but I hope it helps in some manner.  Where is your home?  Joe Gladden

http://hap.usace.army.mil/EP_PCS.html