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


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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 Guerry Clegg on August 30, 2017 at 11:53am

Scott, is there a mortgagee letter that states a credit score threshold for non-Streamline? I have never seen one. I had 2 traditional short sales that were denied because the sellers abandoned the property, so I tried to get them approved for a Streamline. Both were denied because they had co-signers (parents) with 700-plus scores. But they would have been eligible for the traditional HUD short sale if they had not abandoned the houses.

Comment by Scott on August 30, 2017 at 11:24am

We have clients declined all the time for the credit score being above the threshold.  For whatever reason, HUD doesn't grant variances for that particular requirement.  It's unbelievably frustrating.  The servicers adhere to that guideline and HUD won't do anything to help.  I can't tell you how many times we've dealt with this problem.

Comment by Corinn on August 30, 2017 at 11:00am

I'm with you on that, Guerry.  I think they're confusing it with a different guideline.  Just thought I would check with the gurus on this site, in case I missed an update on a guideline or something.  I'll get FHA involved on it, which is what I was planning on doing anyway.

Thanks for taking the time out to respond!

Comment by Guerry Clegg on August 30, 2017 at 10:56am

Corinn, I think the Lender is getting it confused with Streamline. I don't know of any mortgagee letter that states that, and my personal experience is I've had FHA sellers  maintain good credit and stay current until missing their last payment on purpose due to the inane rule that they must be 30 days delinquent to close. I would escalate.

Comment by Corinn on August 30, 2017 at 10:34am

Can anyone verify this...

If seller's credit score is higher than 580, they are not eligible for a short sale.  Lender states that, since their credit score is higher than that, they are not eligible for the s/s, and would have to sell the property for what is owed.  I've never heard of this before.  

I know about the streamlined review, because of credit score, but this is new to me.  Has anyone else encountered this?

I appreciate your feedback!

Comment by Gina Smith on August 2, 2017 at 12:06pm

is mortgagee, lender, responsible for asset preservation on a vacant house in a short sale ?

Comment by Bill Garrett on June 7, 2017 at 8:16am

ANY CURRENT FHA//HUD CONTACT?   Does anyone know if Darrell Powell is still available to pull a file a variance request from the FHA swamp? If not, is there anyone currently doing what he  once did for us?  Thanks.  

Comment by Warnie Shaw on April 13, 2017 at 11:20am

I'm having a problem with Loancare , We have an FHA appraisal that was done Jan 2017 for 189,000 per FHA guidelines they should net 158,760 . Our offer is for 177,000 @ 6%. FHA will net more than 158,760 but the servicer continues to deny the offer as being to low . HELP !!!

Comment by Alex on March 22, 2017 at 10:20pm

I am negotiating a FHA short sale where the servicer (Kentucky Housing Corporation) owns the second mortgage. They are refusing to order the appraisal because they said they would get in trouble by FHA for ordering it when they know it is worth more (there has not been an interior or even drive by appraisal). They are getting this info from previous sale in 2007 (height of market before crash) when it sold for $105k. We have a contract on it for $67,000, and have sent them supporting comps and contractor bids to get property back in selling shape. I know it would easily appraise if they would just order it. The servicer only has 1 person in short sale department, so I don't know how to escalate or who else to contact. Should I contact FHA directly? Has anyone else dealt with something like this before? because it is a definite first for me. I think the servicer thinks they are going to get money back if it goes to auction, which is not the case.

Comment by Jim Stewart on March 21, 2017 at 12:49pm

FHA short sale with Wells. ATP for price of $181,500 issued on 3/1/17 and good through 6/29/17, fully executed by seller and confirmed in WFC hands. Now WFC says appraisal is no longer valid and new ATP is needed with new appraisal of $205,000. Seems to me that the old appraisal is WFC's problem.  Am I wrong?  Can they unilaterally decide an ATP isn't valid anymore???


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