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: 580
Latest Activity: Mar 6

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

NOVAD as 2nd lien

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

FHA short sale with Partial Claim

Started by Mike Rosania. Last reply by Jim Stewart Feb 21, 2017. 10 Replies

Reverse Mortgage with HELOC

Started by Lisa Jalufka. Last reply by Brett Goldsmith Jan 31, 2017. 1 Reply

Comment Wall


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

Comment by Tyra General on July 22, 2015 at 2:52pm

Hi All. I have a short with Flagstar on the 1st and Regions (in Recovery) on the 2nd. Regions will release the lien for $4500 (amount that's being requested from the 1st) and then setup a payment plan for the remainder of the balance (20%). 

Does anyone anticipate challenges with FHA/Flagstar accepting a settlement that includes a payment plan after settlement? 

Also do you think the 2nd stands to gain anything if the home goes into foreclosure? I'm asking because it is in the recovery department and has been discharged, but they only want to settle for 20% of the balance which is at about $11k. I didn't want to overlook any reason why they may prefer that my client go into foreclosure or declare bankruptcy. 

Your feedback is greatly appreciated. 

Comment by Jeffrey W Wolff on July 13, 2015 at 11:18am

Thanks guys.  I will let you know what happens.

Comment by Kevin - Greenville, SC on July 13, 2015 at 11:04am
Comment by Jeffrey W Wolff on July 13, 2015 at 10:48am

Thanks for that insight.  She is no longer making payments.  She received the loan based on additional monthly income from child support payment which is no longer valid.  So her income has dropped by $1300/month and her expenses have gone up as well.

Comment by Kevin - Greenville, SC on July 13, 2015 at 10:46am

I agree. If your client is offered a mod they generally must take it. It's up to the homeowner to decide what to do after that.

Comment by Jeffrey W Wolff on July 13, 2015 at 10:30am

Client has been issued 3 loan mods, when the short sale was in process.

If the guidelines are based on gross income and do not account for food and other expenses, then we have a major flaw in the FHA Guidelines.  Gross income is 3301.  Gross expenses are 4416.

Comment by Jeffrey W Wolff on July 13, 2015 at 9:42am

Need a little help on a US Bank FHA short sale. I have had the file converted from a short sale to a loan mod 3 times even with opt out letters.

I opened a ticket, the 2nd time with HUD and they called me this morning to say the FHA HAMP guidelines require a loan mod even if the borrower is still underwater $1300/month. (She lives in the property). They said it does not factor into the equation.  How she has to pay for groceries, utilities, etc is not their concern but only a 40% of gross income.  They said the only way around it is a credit score of 579 or lower.  If these are truly the guidelines we have major problems.  I also opened a complaint with US Bank last week and waiting for response.  Anyone have any ideas?


Comment by Tyra General on June 25, 2015 at 2:52pm

Thanks Brett! 

Comment by Brett Goldsmith on June 25, 2015 at 1:52pm


   If they won't accept the payoff per HUD guidelines they will be forcing contributions into play. Regions can be tough. They likely can get budged down from 50% of the UPB though.

[email protected]



Comment by Tyra General on June 25, 2015 at 12:00pm

Anyone every dealt with a short sale that has a 1st (FHA) and a second that is in the recovery department with another lender? Trying to get to the bottom of this. The lender (Regions) does not want to take any less than 50% of the balance. 


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