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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
customerservice@novadconsulting.com
301 NW 6th Street, Suite 200
Oklahoma City, OK 73102
National Servicing Center:
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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.
Started by Noelle Battle. Last reply by Brett Goldsmith Nov 22, 2019. 5 Replies 0 Likes
Started by Neil L.. Last reply by Brett Goldsmith Oct 3, 2019. 2 Replies 0 Likes
Started by Savita Savita. Last reply by Brett Goldsmith Sep 26, 2018. 1 Reply 0 Likes
Comment
@Neddie PFS@Brett Goldsmith Internal Revenue Code(IRC) Seciton 108 Cancellaltion of Debt (COD) also known as the insolvency statute. Yes talk to CPA -- Basically, iSec. 108(a)(1)(B) provides for the exclusion of COD income if the debt discharge occurs when the taxpayer is insolvent. Sec. 108(d)(3) defines insolvency of the taxpayer as the excess of liabilities over the fair market value (FMV) of assets determined immediately before the discharge of debt. The excluded income is limited to the amount by which a taxpayer is insolvent, as stated in Sec. 108(a)(3). For example, if the taxpayer has COD income of $500,000 and the excess of liabilities over assets immediately before the discharge is $450,000, the taxpayer includes $50,000 of COD income in his or her gross income
@Neddie PFS short sales always settle debt in full. 1099C will be for settled amount and borrower should look into if they are insolvent or not.
The HUD short sale was approved (PreForeclosure Sale Program). The approval states:
"The net amount will be accepted as final payment and the lien released, an IRS 1099C will be filed at year end in accordance with IRS regulations."
It sounds like a full release. No mention of the note though. What's your take? TYIA
@AL typically short sales are sold as-is and repair costs will not be approved. Repairs should be baked into the purchase price.
310-564-6389
Is repair allowance or repair assistance allowed a fha short sale?
@AL You should confirm but I believe the 15 day marketing period may not be required for the PFS program if the property is in foreclosure. Typically an offer is needed to get an appraisal ordered if a FHA borrower is in foreclosure.
310-564-6389
Started Working on a FHA short sale with a foreclosure sale date scheduled in well over a month. Bank has agreed to do a short sale and 1st legal has been filed. We have submitted an offer and the bank has order an appraisal. My understanding is the property has to be listed on the MLS for at least 15 days after the ATP has been issued before the accepts any offer. Would it be any different if 1st legal is filed? Fellow members your input would be helpful!
@kimberly Yes, I've experienced before. They won't do a short sale if they advance taxes and aren't reimbursed.
310-564-6389
I was just informed by NOVAD that the back taxes that were just paid by them will need to be added to the sales price for approval. In other words, the buyer has to reimburse HUD for the taxes paid above the 95% of value. Anyone ever dealt with this? I think this is going to kill the deal we have.
Brett, I'm sending you an email and will call you tomorrow or Monday.
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