I was at the closing table for a long-running short sale, which I managed to push through Countrywide after 2 months of negotiations. We had a great offer and CW only ended up forgiving about $12,000. Better yet, they got the buyer's mortgage! Worked out well for everyone.
One strange incident during the closing was the inclusion of a line item entitled "FHA Incentive" added to my sellers credits. $1,000, which I had heard might be there but wasn't sure. Very nice, if it was for real. The closing officer commented that the incentive was a new program to encourage sellers to sell their home short rather than let it go to foreclosure. Knew about that. So far so good.
Well, just below that on the HUD, the $1,000 was taken back! Commenting again, the closing officer said that although he'd only done one or two if these so far, his understanding was that the lender takes back the $1,000 until everything is settled, after which they MIGHT send the sellers a check for some or all of the incentive.
Now, my understanding was that the $1,000 incentive applied in full if the listing agent was able to close a sale within 90 days. We did do that. I believe the amount drops to $750 if things go beyond 90 days.
My questions were:
a)Whats the point of giving the incentive, then removing it? Just so CW can say they offered it?
b) Why, if this is truly an FHA-sponsored incentive, would CW be justified in not immediately forwarding the monies to the seller upon settlement? They'd already forgiven the loan difference, so that should not be a factor. Doesn't seem like much of an incentive.
The closing officer did not have an answer for my questions. This is all part of the short sale process - one never knows what will happen next. Any thoughts?
