Comment

Comment by Andy Morris on July 27, 2011 at 4:33am

not to mention many many lenders want you to put money up front for an reo.

Comment by Jeff Payne on July 27, 2011 at 4:30am

Jim, I am an REO agent and agree with you. Sounds crazy but I would actually rather list and sell a short sale.  REO are getting tougher and tougher in my area, too much red tape, too many levels to deal with at the banks and asset managers

Comment by Andy Morris on July 27, 2011 at 4:29am

HUD REO's are a disaster.  They take double the time to work.  But I have a chase FHA short sale and it is JOY:)  They several days and order appraisal immediately.  They are on it.

Comment by Jim Stewart on July 27, 2011 at 4:27am

Is anyone else finding that purchasing a HUD foreclosure is a disaster right now?

Comment by Matt Newman on July 16, 2011 at 11:11am

There are a lot of different interpretations when it comes to partial claims.  I have closed 2 with Citi recently where there were large partial claims and HUD granted variance requests on both of them.  The servicer just has to ask HUD to review it.  In fact, we had the request approved within minutes via email from HUD.  The details on the most recent deal were as follows:

 

Appraisal:$230,000

Partial Claim: $23,000

Final sales price: $210,000, net to lender: $172,655.22

Original approval required a net of $202,400

 

Don't take "no" for an answer.  Bank of America is TERRIBLE.  I had another FHA short where we were $1,200 off on the required net and they would not request a variance.

Comment by Barbara A. Reagan on July 16, 2011 at 10:55am

One of those things my sellers didn't mention (they had forgotten about it because they weren't paying on it).  Thank God the agent & the buyer on the other end were okay with the changes we had to make to get this thing approved!  But now I know when I have an FHA seller to make sure I ask the question and probe a little harder than I did!

 

Comment by Kent Dills on July 16, 2011 at 8:54am

Good point about plusing up the gross to account for the partial claim to hit the required net Barbara!  Excellent learning point!  ;-)

Comment by Barbara A. Reagan on July 16, 2011 at 5:37am

I actually like the FHA process.  However, as I have recently found out, you need to find out if your seller went through the FHA Partial Claim process before they decided to do a short sale.  I found out the hard way that when calculating the net to the bank that they take into consideration full repayment of the partial claim, which then means that other charges can't be paid, the commission would need to be reduced or the price raised up beyond the FHA Appraised VAlue in order for the transaction to get the bank their net and get the property to closing.  Make sure you ask your seller when taking the listing so that you know how you will need to proceed!

Comment by Kathleen Lordbock on July 16, 2011 at 4:46am

An FHA-HUD sale has very specific directives on what will or will not be paid (on the HUD1).  There is a specific % of the appraised amount that you need to net on the offer.  That includes closing fees, commissions etc.I have listed them both before and after the Approval to Participate letter- but will now only list after that process is done and the appraised fee is a known factor.  It really saves time and you do not have to raise the price up on the MLS because now you know you have to hit a certain net.

The process does work and I have done several of these- contact HUD if you have a hang up ( not an annoyance but a true issue).

 

 

Comment by Tara Polley on July 15, 2011 at 12:40pm

Hi Connie,

Sorry you are experiencing the same situation. :(  The good news is that the closing costs will be covered, including Realtor commissions. In a short sale situation, the lender pays closing fees, just be sure that your Realtor states in your purchase agreement from the buyer that any costs not covered by the lender will be paid by them, so you don't end up paying their home warranty, lender closing costs or HOA fees out of pocket.

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