FHA - HUD Short Sales


FHA - HUD Short Sales

HUD rules for FHA short sales, tips, experiences, etc.

Fax LOA:  918-236-3274

PH 877 622-8525

Members: 581
Latest Activity: Sep 26, 2018

FHA Preforeclosure Sale Guidelines


 Click The Button Now To Hire A Short Sale       Superstar To Support You.


7-9-13 Updated Pre-Foreclosure Sale (PFS) and Deed in Lieu (DIL) of Foreclosure - Effective 10-1-13.

FHA National Servicing Center 

(877) 622-8525 Customer Service

1-800-489-1733 Fax

1-866-808-5050 Fax for LOA


301 NW 6th Street, Suite 200
Oklahoma City, OK 73102
National Servicing Center:


Please note that effective October 1, 2014, Deval LLC will no longer be HUD's National Servicing  loan servicing contractor. The new contractor, Novad Management Consulting will be your new point of contact.


For all Customer Service questions please contact [email protected]

FHA Contract Clause

"Sale is contingent upon the seller receiving prior written approval of Insert Name of Lender/Servicer."

FHA Listing Agreement Clause

“Seller may cancel this agreement prior to the ending date
of the listing period without advance notice to the broker, and
without payment of a commission or any other consideration if
the property is conveyed to the mortgage insurer or the mortgage
holder.” The sale completion is subject to approval (under HUD
guidelines) by the mortgagee.


Discussion Forum

Hud/FHA declining to do short sale

Started by Savita Savita. Last reply by Brett Goldsmith Sep 26, 2018. 1 Reply

NOVAD as 2nd lien

Started by Noelle Battle. Last reply by Jason Sanseverino Mar 6, 2018. 3 Replies

Comment Wall


You need to be a member of FHA - HUD Short Sales to add comments!

Comment by Luther Fisher on December 12, 2016 at 1:30pm

Thanks Paul, I just sent it out.

Comment by Luther Fisher on December 12, 2016 at 12:55pm

I have an issue with a closing attorney. We received approval to close and there are HUD partial claims but the attorney is questioning the letter we got saying it doesn't specifically state that when the funds are received the claims are 'paid in full'. So we are at a standstill. 

I contacted the lender and they said that there is no further documentation provided. 

Any advice?

Comment by Dean E Eshelman, CPA, CDPE, IRES on December 12, 2016 at 12:20pm

@Gladys Nunez. What is the hardship besides payment? Medical, relocation, job downsize etc. See Mortgagee Letter 2013-23 for Cash Flow criteria. portal.hud.gov/hudportal/documents/huddoc?id=13-23ml.pdf

Comment by Gladys Nunez on December 12, 2016 at 10:59am

The cash flow sheet showed a negative flow which baffles me that they denied it. I threw everything but the kitchen sink in that worksheet. They were looking at "overtime" and bonus payments made and because of this said we are technically able to afford the home! I am going to resubmit the financial worksheet along with the hardship letter. Should I just ask for the processor to recalculate? or appeal outright? Thanks Guerry 

Comment by Guerry Clegg on December 12, 2016 at 10:43am

Gladys, you should definitely appeal. You don't need to be behind to get approval to participate. You just have to be behind to close. A Realtor cannot tell a seller to not make a payment, but a seller can connect the dots. I had one where we had to postpone closing 2 weeks so he could miss a payment. As far as you having negative cash flow, sometimes the processor simply miscalculates it. I've had that happen as well. Maybe they are looking at liquid assets.

Comment by Gladys Nunez on December 12, 2016 at 10:24am

We were denied participation in a short sale by wells fargo because of income and we are current on the mortgage demonstrating that we ARE able to make the payments. Processor said I can appeal and resubmit the financial worksheet with whatever expenses we might've "forgotten.  But the financial worksheet I submitted already showed us $400 in the RED. How much more are we supposed to show we are in the red and is the real issue that we are CURRENT?  If we stop paying, but still show same income, won't this still be an issue? We don't know how to proceed from this point. Any advice?

Comment by Thomas Turner on December 6, 2016 at 4:26pm

I have (2) FHA/HUD short sales denied this week for because variance was denied due to repairs needed??? Anyone have any suggestions...

Comment by Chad Gelsinger on November 30, 2016 at 10:18am

Jim, simply contact Novad (see contact info in guidelines above) to order a payoff. You will need a generic 3rd Party Authorization. Whatever the amount is, it will need to be paid in full. WF will apply for a variance with HUD to allow this to happen. Work the short sale as a normal FHA file. Chad 

Comment by Jason Sanseverino on November 30, 2016 at 10:17am

Sounds like this may be a Partial Claim Loan - these are paid in full with short sales. Request a payoff from [email protected] / add to HUD-1 as you normally would - 

Comment by Jim Stewart on November 30, 2016 at 10:14am

working an FHA short sale with Wells. Apparently the seller did a forebearance in 2014 and signed a 2nd deed of trust for around $16k. Wells tells me I have to deal with HUD directly on this. I've not come across this situation before. Any advice?? Just work it as a regular 2nd lien??


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