Short Sale Case Study: Seller in Ogden gets $48k deficiency waived by GMAC/FHA

Learn how to get your GMAC and/or FHA short sale approved in this GMAC/FHA Short Sale Case Study.

GMAAC/FHA Short Sale Case Study:

Property Location: Ogden, UT – Weber County

Lender: GMAC (insured by FHA)


“In September, my husband become ill and the doctor bill started to mount up.  It became necessary to either pay the doctors bills or pay the house payment.  His medical bills increased from that point on. In January he was hospitalized, had surgery, followed by many complications.  He spent 3 weeks in ICU IN Ogden, 6 weeks in critical care in a Slat Lake City hospital, and then was moved to a rehabilitation unit for 4 more weeks in Salt Lake City, before he came home with home care from nursing and a rehabilitation facility.

At this point, I see no other solution than to sell our home in order to settle our accounts.”

Note that our sellers where almost a year behind on payments before we even started the process.

Sales Price: $92,000

GMAC/FHA Loan Balance: $152,742

Loan Arrears: $6,692

Deficiency Balance: $74,422

Settlement: Deficiency waived!


On September 9, the property was listed.  Within 4 days, two offers were received.  This is the norm – eventually we had 7 offers on the property.  Our 10-step marketing plan and on-target pricing assures offers quickly – which is the primary first step with any short sale.

A few days after listing, the seller selected the best offer and submitted it to our Northern Utah Short Sale team (which includes an attorney and 6 negotiators, some of who used to work for the banks in their short sale departments).  By September 28, the file had been assigned to a specific GMAC negotiator.

An FHA appraisal was completed on October 8.  For the next few weeks, the only information we were given was that the appraisal was under internal review.

On October 31, the GMAC negotiator asked for more information on the sellers’ financial information (updated bank statements, explanation of some of their expenses and hardship – this is normal and was expected – we had our sellers ready for this).

On November 5, GMAC informed us that the sellers were accepted into the FHA pre-foreclosure sale (PFS) program (aka FHA’s short sale program).  The appraisal had come in at $89,000 and GMAC/FHA wanted an offer that would net them approximately $78,000.  We had to relist the house at $89,000 per GMAC/FHA’s request (this was $11,000 higher than the original list price).

The sellers were asked to sign a letter that they agreed to the PFS program’s requirements which included continued upkeep of the property, that the loan be at least 31 days delinquent at the time of final approval of the short sale and that an offer from a qualified buyer had to be obtained by March 5.  The program also offered to pay the sellers between $750 at closing, and $1,000 if closing occurred on or before Feb. 3 (not a problem with 7 offers!).  The sellers were overjoyed to get this letter, to say the least!

Since GMAC/FHA wanted a higher sale price than any of the 7 buyers had offered, we went back to each buyer and asked for their highest and best offer.  All but 2 buyers dropped out.  The sellers selected the best offer and it was submitted to GMAC on November 13.  Since the buyer was a cash buyer, a proof of funds letter was also required.  GMAC responded within 3 days with their acceptance.

The revised offer was accepted by GMAC/FHA and the deficiency waived.  The buyers, being cash buyers, were able to close very quickly.  Overall, our team turned this into a very fast process as far as short sales go.

The sellers were extremely responsive and cooperative through this whole process, despite their continued hardship and battle with health issues.  Their willingness to respond to calls and emails from our team, turn around paperwork quickly and maintain a great attitude contributed tremendously to our team’s ability to move this short sale through quickly.

Another key was the fact that this was an FHA backed loan and once the sellers were accepted into the PFS program, things moved very quickly.  It took 2 months to get the sellers into the program, and once in, closing occurred quickly..

If you are a house seller, and would like to learn more about short selling your home (including how to get a free one hour consultation with a real estate attorney), please go to: