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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: 570
Latest Activity: on Friday

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

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

Allowable and Disallowable costs

Started by Guerry Clegg May 19. 0 Replies

Borrower's Incentive Compensation & NET Question

Started by Flor Melgar. Last reply by Ismael Medina Jul 9, 2015. 5 Replies

Comment Wall


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

Comment by Luther Fisher on August 9, 2016 at 7:30pm

the 1st mortgage is owned by midland mortgage, then are two loans to HUD itself, presumably for the missed payments. 

Comment by Luther Fisher on August 9, 2016 at 7:29pm

@brett...thanks! actually these are loans owed directly to HUD. the borrower did a few modifications and then hud put mortgages on the property for the missed payments...if I'm looking at this correctly. they have loan #'s on them too but it says the lender is HUD. 

Comment by Brett Goldsmith on August 7, 2016 at 8:29pm

@luther Partial Claims will need to be paid in full. The servicer should submit a variance to HUD to pay these in full. These partial claims often push the minimum NET below the 88/86/84% tiers of the ATP. The borrowers likely won't get any relocation incentive if that is the case.


Comment by Luther Fisher on August 7, 2016 at 5:50pm

I have a seller who has 3 HUD loans, these are loans that look to be directly from HUD. They did a few modifications over the years. Are they fairly easy to deal with?

Comment by Frank Biganski on June 21, 2016 at 8:33am

Thanks Brett. It's not free & clear but I'm having him pay for a title search to see if it's attached to his primary residence. I remember in 2008, it was attached as he borrowed $60,000 in equity from the land to purchase his primary home.  But he refinanced the FHA loan, and it appears the 2 are no longer attached (but again, not 100% sure which is why I having him pay for a title search).

Comment by Brett Goldsmith on June 20, 2016 at 10:50am

@frank I think it's worth to try, just because they own another asset with potential equity does not necessarily mean they won't qualify in my opinion. Do they owner the land free and clear?

Comment by Frank Biganski on June 20, 2016 at 8:00am

Hey folks, I have a potential FHA short sale where the borrower(s) would qualify for the preforeclosure sale. They are upside down in their mortgage, the wife cannot get work for years now, and income has been reduced to the point where even their utilities have been getting cut off.

However, the borrower also owns a parcel of land that is zoned light industrial and is tax assessed at $175,000. In your experience, do you think they "might" qualify for the FHA preforeclosure sale, or would they be required to sell that land, or what?



Comment by Jeffrey W Wolff on June 2, 2016 at 4:52pm

Does anyone from Illinois heard the HUD has reduced attorney fees across the board to $250?  It used to be a max of $1500.  I have my authorization getting verified and will talk to them directly, but M&T Bank just reduced attorney fees to $250 and that will not fly in Illinois.  Glad I am not an attorney.

I will post once I get verification if nobody responds.  Thanks  Jeff

Comment by Brett Goldsmith on May 17, 2016 at 8:12pm

@jim They are still requested to be paid in full by HUD through a variance.


Comment by Chad Gelsinger on May 17, 2016 at 8:11pm

Jim, the HUD Partial Claim Loans are typically not an issue. Just send a 3rd Party Authorization, with FHA Case number and order a payoff. The Partial Claim will be paid in full from the sale proceeds. For the most part, it is a fairly simple/straight forward transaction. Chad.


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