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I have a short sale transaction that has received approval from the lender (BofA). The property has an HOA, and they are charging very high fees for their demand (approx $600). That fee does not cover the possible missed payments, late fees, and penalties. Obviously, the home owner is unable to pay this fee, but it is necessary in order to move forward and close the transaction. As of now, the buyer is still on board, and obtaining financing (FHA loan). However, if I cover the fee, there is a chance that the financing will not go through, and I'm out $600 bucks.

1. I could ask the lender to cover the upfornt fee.
2. I could have the buyer pay the fee out of their deposit
3. I pay the fee myself

Has anyone had a similar situation? How should this be handled?

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is this for past due hoa dues from the seller? or an up front fee to the buyer? I had a short sale, and there was over $10,000 in past due HOA fees! you need to find out how much the past due, if there is any... right away... i had my escrow verify the exact total amount due to the HOA, and put it in the HUD. try that, and Submit an updated HUD to the bank, including those fees. it should come out of their net on the short sale if it is due from the seller. If its their up front fee for setting up the buyer, thats common and the buyer needs to pay it. its common for the hoa to charge a set up fee and / or a month in advance...good luck :-)
When talking with the escrow office. They suggested athe fee be paid from the buyers deposit, but not sure if thisis a fee to the buyer. The fee is for disclosure information for the buyer. This fee does not include what is past due.

I will try your suggestion and get an updated HUD. Thanks for your response and help!


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