Last year, “Roger” and “Crystal” needed to sell their Ewa Beach, Hawaii home because of a military PCS (Permanent Change of Station) move back to the mainland.

Due to the drop in prices from the time they purchased their Ewa Beach Single Family Home until it was time to sell, they found themselves in an upside down position just like many other Hawaii home owners.

They decided to list their home as a Short Sale adding to the already inventory of Short Sales in Ewa Beach.  Simultaneously, they applied for the HAP or Homeowners Assistance Program through the US Army Corps of Engineers.

After listing their home with Team Kucic, of RE/MAX Honolulu as a Short Sale, multiple offers were received, Roger and Crystal selected one offer from a VA Military Buyer in Hawaii and within 45 days, the lender approved the Short Sale and the transaction closed.

As part of the Short Sale Approval, the lender required Roger and Crystal to sign a promissory note saying they would pay back $XXXXX to the lender over a period of years at a 0% interest rate.  Roger and Crystal negotiated with the lender and got the lender to cut the amount by 50% if they paid the amount in full all at once.  The lender agreed.

Initially after the short sale, Roger and Crystals credit dropped 70 points.  After they paid off the agreed upon amount to the lender (50% less than what the lender wanted), the lender reported the transaction as “settled” to the credit bureau and their credit score went back up 40 points. When it was all said and done, they had lost 30 points on their credit score.

The HAPapplication that they submitted was disapproved because they had not seen a decrease of 10% or more on the price of their home.  I don’t know if the HAP folks are looking to Zillow or RealtyTrac to get their info but they (HAP) are WRONG about the 10%!  Their property definitely went down 10% or more.  This is unfortunate because Roger and Crystal met every one of the criteria set forth by the HAP program only to be denied due to HAP obtaining inaccurate information about home values in Ewa Beach.