FHA Short Sales

Short sales that are FHA insured. If you have not had one yet you will soon. These are handled a bit differently and I feel the process has been a good one over all. There is a system in place and it must be followed.

A few highlights . . .

- There are required documents, use them (see links below).
Submission of Form HUD-90036 and the subsequent approval supplied on form HUD-90045 are required prior to listing the home for sale. Form HUD-90036 is completed and signed by the seller and submitted to HUD through the lender servicing the loan.

- For the first 30 days of marketing, mortgagees may only approve offers that will result in a minimum net sale proceeds of 88% of the "as-is" appraised Fair Market Value (FMV).

- During the next 30 days of marketing, mortgagees may only approve offers that will result in minimum net sale proceeds of 86% of the "as-is" appraised FMV.

- For the duration of the marketing period (60 days), mortgagees may only approve offers that will result in minimum net sale proceeds of 84% of the "as-is" appraised FMV.

-HUD will not allow a buyer to inflate the purchase price to cover seller concessions requested.

- $1000 potential seller gift if they contract and close within 90-days of listing.


HUD's Information Page oh FHA Short Sales (PFS - Pre-Foreclosures Sales)
http://www.hud.gov/offices/hsg/sfh/nsc/faqpfs.cfm

HUD Forms
Mortgagee Letter 2008-43 (MS Word doc file)

Hud 90035 Information Sheet

Hud 90036 Application to Participate

Hud 90038 Homeownership Counseling

Hud 90041 Request for Variance

Hud 90045 Approval to Participate

Hud 90051 Sales Contract Review

Hud 90052 Closing Worksheet


And an FYI - All HUD Forms are listed and can be downloaded here!

Overall they system is defined and workable. I like it because the lender MUST follow the HUD requirements and that reduces some of the bulls@#t that some of them seem to like to stir up sometimes.