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: Mar 7

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 Brett Goldsmith on March 7, 2019 at 8:41am

@ Guerry, call Novad with FHA  Case # and open up a ticket to get a HUD Counselor involved if you are having problem with M&T's servicing of the FHA loan.

[email protected]


Comment by Guerry Clegg on March 7, 2019 at 6:57am

How do I escalate an issue with NOVAD and with M&T Bank? Two issues, actually. Lack of communication with my negotiator and an unrealistic valuation due to property condition.

Background: I have a short sale with M&T. We have an ATP, even though we didn't receive it from M&T for nearly 10 days after it was issued. Seller signed and we returned it 10 days ago. Negotiator emailed yesterday stating that the file would be closed if we did not return the signed ATP. I replied -- with the signed ATP attached -- that I sent it 10 days ago but here it is again. She replied that I could send it directly to her. I replied that it was attached to the email she was replying to, so please confirm receipt. I had also asked in that email and the previous one about the appraisal for valuation because it came in high for the property condition. No response to that.

Comment by Brett Goldsmith on September 13, 2018 at 8:54am

The only time one is able to go below 84% NET from what I've ever seen is when there is a partial claim that is required to get paid.

Comment by Brett Goldsmith on September 13, 2018 at 8:52am

Gurerry, let me rephrase that for you. You can get to a lower tier prior to the requested time period per the ATP by having a variance submitted. Here's an example: I've gotten 84% NET approved within 30 days of borrower being in the PFS program.

Comment by Guerry Clegg on September 13, 2018 at 6:49am

I'm confused. Why would you need a variance for 86 percent within the 30-60 day period when that's the required net for that period?

Comment by Brett Goldsmith on September 12, 2018 at 4:48pm

@Gregg depends if NET is being exceeded or not. It's possible to go straight to 86 or 84% tier within 30 days but you need a variance submitted.

Comment by Guerry Clegg on September 12, 2018 at 11:41am

That's good to know. The last time I tried they were completely rigid, but that has been a while. Our net was about 94 pct, which made it more frustrating. 

Comment by Alexis Adams on September 12, 2018 at 11:38am

It's hard to say as a general rule as I am sure it's case-by-case but I have seen HUD go below required net and allow concessions within the first 30 days. For example, a few weeks back I had a case with an FHA buyer where we were just shy of 86% immediately after the appraisal with 3% seller concession and HUD approved the variance. If you're going to go below 88%, I would just say never go below 84% bottom line and it doesn't hurt to have the servicer submit the variance to HUD and see what they say. HUD seems to be responding quicker as well so there isn't a huge wait time that I am seeing anymore. 

Comment by Guerry Clegg on September 12, 2018 at 11:32am

So Brett and Alexis, it sounds like HUD has loosen their rule about the allowable/disallowable costs. Is that right? If so that's good to know. It still has to net 88 percent for the first 30 days, so that doesn't allow much wiggle room any way.

Comment by Al on September 12, 2018 at 10:45am

Reason why I ask is on my previous offer for the same property the bank only allowed 1% but it was a conventional offer. Now I have a fha offer and seller is asking 3% but its a fha offer. 


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