Does FHA still require homeowner to be late?

Does the seller need to be late for FHA to approve a short sale?

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Permalink Reply by Bryant Tutas on January 9, 2012 at 6:41am

It is my understanding that yes they do. FHA is all about financial affordability. If they are current then HUD assumes they can afford to make payments.

Permalink Reply by Kevin - Greenville, SC on January 9, 2012 at 9:41am

Yep.

Permalink Reply by Kevin - Greenville, SC on January 9, 2012 at 9:43am

I'm planning to attend this in February and I'm sure I'll be in the minority being a Realtor.  I hope to be able to ask some good questions...and get some good answers.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sf...

Permalink Reply by Jeff Payne on January 9, 2012 at 9:49am

Are you going to be at FR next month in Orlando?

Permalink Reply by Kevin - Greenville, SC on January 9, 2012 at 2:21pm

Gonna try, but it would probably only be for the Saturday session. Can I scalp a ticket for that:)

Permalink Reply by Jeff Payne on January 9, 2012 at 2:24pm

Yes you can get a day pass

Permalink Reply by Kevin - Greenville, SC on January 9, 2012 at 8:12pm

Yea, I can't believe they charge $200 for it though. 

Permalink Reply by Jeff Payne on January 10, 2012 at 3:57am

Kevin, you should try to come on the day of our short sale mastermind.  Not sure of the day yet though.

Permalink Reply by Alan Nguyen on January 9, 2012 at 1:24pm

The borrower still must be 31 days  delinquent (1 missed payment) at the time of closing. 

Permalink Reply by Michael Schneider on January 10, 2012 at 5:34am

Yes, they do, at least for a short-sale under PFSP.  The rules state "must be 30+ DPD at time of sale".  Which means, must have missed  two payments or more, not one. (You miss the first on day 1 and the second on day 30, basically)

But, be careful, because this is often (generally?) implemented as " must be 30+ DPD at time of issuing the ATP", which is the approval to the short-sale program, not approval of the sale.

I tried to work with a seller that wanted to stay current as long as possible, so I thought it would be okay for her to be current at time of ATP.  Wrong.  Wells required us to wait until two payments were missed, and the buyer walked. 

@Kevin.  This is one of the reasons why I hold the FHA in low-esteem, along with valuation, property and sales management.  IMHO this one of the most mis-guided policies in short-sales.  This could only be supported by a group that does not understand this marketplace.

And, when you talk to senior managers at the FHA, as I have done, they tell you that their policies must be the best possible because they were develop by the FHA.

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