Shortsale On A FHA Mortgage..is It Possible?

I am working 2 shortsales...they are fha mortgages
the common denominator/response from the lenders is that the appraisals came in too low therefore it doesn't meet fha standard to do short sale...apparently there has to be s 63% of what is owed or they won't do the short sale...period....one of the lenders is Countrywide and the other is National city...both with the same responses
My question is...is there a way around this or should I not do anymore short sales with FHA mortgages

Q. Was there origination fraud resulting in an unrealistic appraisal, or was the dwelling subject to fire or water damage (for which there may be an insurance claim pending)?

No...there wasn't any claim for any damage at all...they either want to do a deed in lieu or they will foreclose on the property...????

I have dealt with both lenders and here is the problem.

They make more money by foreclosing on the property, collecting the mortgage insurance then selling the property at a deeper discount than you offered as an REO.

Its a scam but a legal one and the big boys have the system 'gamed' in their favor.

Yes the FHA has a short sale program and they do allow them.

Problem is the originator will be faced with a chargeback of the loss instead of pocketing an insurance claim.

Hope this makes sense to you [addsig]

Ahh...yes thank you for your wisdom....I'll make sure I steer clear of FHA stuff

Frankly, I've found FHA preforeclosure shortsales relatively easy. I've never had an instance where the lower ratio came into play which is why I asked you what I did.

FHA shorts are routinely accepted if the lender nets about 85% of FMV.

Ditto SSP. 85% fha all day.

Here is a summary of the requirements for an FHA-insured Short Sale:

1. The borrower must be delinquent at least 3 months.
2. Net proceeds of the offer should be at least 82% of appraised value.
3. The appraised value should be at least 63% of the mortgage.
4. The mortgagor must be an owner-occupant.
5. There is verification of the borrower's decrease in income showing inability to pay the mortgage.
6. The property was marketed in such a manner that an offer for fair market value could be obtained.

I ran into a problem on my first FHA SS where I was really aggressive and got a BPO below 63% of the mortgage and the SS was denied. After that I told my BPO person that this place is a dump, but we can not go below XXX.