January 10, 2023

FHA CHFA short sale approval

FHA and CHFA short sale approval right in the nick of time!

This New Haven family had been in Covid forbearance for 2 years and simply could not get back on track after the forbearance ended. With a looming foreclosure sale date, their only choice to avoid foreclosure was a short sale.

Short sale challenges:

My clients had a first mortgage with FHA serviced by Dovenmuehle Mortgage, Inc.. DMI does a lot of default servicing for other lenders and is generally a breeze to work with. My clients also had a second loan with CHFA. Short sales with multiple lenders can be diffcult, and with a foreclosure date set for a few weeks out, we had to move fast to beat the clock. 

Getting through the sale:

The market moves slower during the dead of winter, so we listed at an aggressive price and were quickly under contract. DMI went quickly to work on the FHA short sale approval. 

Unfortunately we were also quickly denied by HUD for the short sale, for extreme delays. The loan was 46 months overdue at that time and the lender had not yet foreclosed, leaving the property ineligible for a short sale through the FHA PFS program. 

fha short sale process

We were able to get the foreclosure date postponed, and decided to challenge HUD as the extreme delays were due to the servicer's continuous offers of forbearance extensions. It took a few tries, but eventually HUD reconsidered and approved the short sale. CHFA quickly followed with their short sale approval on the second mortgage as well. 

Short sale approval and closing!

It was now time for the buyer to have delays of his own. Despite the fact we had gotten the foreclosure postponed, many more weeks had passed, and we were once again headed towards a looming foreclosure sale date. The judge had made it clear there would be no further  extensions. 

With the pressure on, all the parties hustled to beat the foreclosure sale date! This New Haven, CT short sale finally closed, with the sellers moving on past their over-leveraged home, and with all their prior mortgage debt forgiven!

Want to stop your foreclosure and short sell instead?

We've helped hundreds of CT homeowners short sell, and we can help you!


When it comes to short sales, Minna is an expert. We had no idea that finding a buyer would be the "easy" part. Getting the bank's approval for the sale was a challenge. Our bank constantly made mistakes, even denying us at one point. The whole process was routine for Minna and she reassured us that we would work through the hiccups and eventually get approved. And she was right. What a relief! We hired Minna based on all of the positive feedback we found online and are glad we did. She's smart, responsive, knowledgeable and shows an overall level of professionalism that puts her in a different league than the rest. She regularly exceeded our expectations and we would recommend her to anyone looking to sell their home.

D.S.

Last Updated on January 10, 2023 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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