Last week Carrie Cowan & I went to a HUD class presented by Vanessa Wilde. It was VERY information. Here is some of the information we learned. - Jodi
- HUD properties are FHA Foreclosures. Once the private mortgage insurance pays off the loan & they become the property of the government.
- HUD now has three asset management companies: Pemco, Matt Martin & HomeTelo.
- You can find all active HUD Listings at: www.hudhomestore.com. This site will have the most up-do-date status. If it's not on here, it probably has a contract. Check here first!
- All agents must register with HUD & HUDHomestore.com
- Properties are listed daily! (even on the weekends)
- Make sure you check the top of the listing for eligible bidders and bid submission deadline.
- If your buyer is getting FHA financing, the property must be E (insured escrow) and buyer must have escrow money for repairs (determined by HUD) which can be factored into the loan (FHA 203B long w/ repairs in escrow)
- The repairs escrow is held by the bank/lender until repairs are made. It's a case by case decision on how funds are released.
-If the property needs over $5k in repairs, it is NOT insurable
-FHA appraisals have typically already been done on the property and are usually online.
- All HUD properties close at Northwest Title Co. (816.792.3335)
- There are potentially 5 different HUD keys (vs the one universal key we all use to use). You MUST call co-op to schedule an appointment. Many HUD homes now have lock boxes on the property. Also, please sign the login form inside each home.
- Commission is now 3% for the buyers agent with a minimum flat commission of $1250.
- There may be multiple back-up contracts on a property and you are now unable to see other bids on a property
- Earnest money depends on the asset management company. HomeTelo & Pemco are $500 (up to $50k) and $1000 (over $50k). Matt Martin varies per property.
- HomeTelo typically has a 20 day cash closing, HOWEVER, it doesn't always close on time therefor you MUST file an extension (which includes a fee). Prepare your buyers for that!
- Typical financed closings are 45 days.
- If an offer is CANCELLED, it means the offer was reviewed but NOT accepted.
- If you are given a "bottom dollar" amount, make sure to add in your commission and any other costs!
- HUD listings are already designated selling agents, however, they will not sign the Agency Amendment
- you MUST have approval from the asset manager to do inspections (and get utilities turned on)
- only Active/Live termites will be treated
- HUD will correct lead based paint issues if it is under $4k.
- ALWAYS print the contract when you submit a bid online! There are certain areas that will be auto-populated and others you will need to write in.
- MUST include: Husband & Wife, Single Person, etc for contract to be accepted
- Earnest money to be held by: HUD Designated Closing Agent (#3 & #9)
- If buyer is paying cash OR getting conventional financing, make sure to check last box on #4
- Make sure #12 is initialed by buyer
Showing posts with label HUD. Show all posts
Showing posts with label HUD. Show all posts
Tuesday, March 1, 2011
Monday, August 9, 2010
FHA Launches Short Refi Opportunity for Underwater Homeowners
Have I mentioned lately how much great information I get from the Lowe's Daily Real Estate News?? This could be GREAT for home owners!!!
FHA Launches Short Refi Opportunity for Underwater Homeowners
RISMEDIA, August 9, 2010--In an effort to help responsible homeowners who owe more on their mortgage than the value of their property, the U.S. Department of Housing and Urban Development provided details on the adjustment to its refinance program which was announced earlier this year that will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth. Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.
The FHA Short Refinance option is targeted to help people who owe more on their mortgage than their home is worth – or ‘underwater’ – because their local markets saw large declines in home values. Originally announced in March, these changes and other programs that have been put in place will help the Administration meet its goal of stabilizing housing markets by offering a second chance to up to 3 to 4 million struggling homeowners through the end of 2012.
“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens. “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”
FHA published a mortgagee letter to provide guidance to lenders on how to implement this new enhancement. Participation in FHA’s refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500. The property must be the homeowner’s primary residence. And the borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115%.
In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.
To facilitate the refinancing of new FHA-insured loans under this program, the U.S. Department of Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens. To be eligible, servicers must execute a Servicer Participation Agreement (SPA) with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3, 2010.
FHA Launches Short Refi Opportunity for Underwater Homeowners
RISMEDIA, August 9, 2010--In an effort to help responsible homeowners who owe more on their mortgage than the value of their property, the U.S. Department of Housing and Urban Development provided details on the adjustment to its refinance program which was announced earlier this year that will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth. Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.
The FHA Short Refinance option is targeted to help people who owe more on their mortgage than their home is worth – or ‘underwater’ – because their local markets saw large declines in home values. Originally announced in March, these changes and other programs that have been put in place will help the Administration meet its goal of stabilizing housing markets by offering a second chance to up to 3 to 4 million struggling homeowners through the end of 2012.
“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens. “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”
FHA published a mortgagee letter to provide guidance to lenders on how to implement this new enhancement. Participation in FHA’s refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500. The property must be the homeowner’s primary residence. And the borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115%.
In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.
To facilitate the refinancing of new FHA-insured loans under this program, the U.S. Department of Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens. To be eligible, servicers must execute a Servicer Participation Agreement (SPA) with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3, 2010.
Friday, July 9, 2010
HUD $100 Down Loan Program
Another great article by The Mortgage Experts in Colorado:
by Chris and Debbie Thomas
We've gotten a number of requests for information about HUD's $100 down deals in the past week, so here's a rundown of what you need to know:
-- A HUD home is a house that used to have an FHA loan, but it went into foreclosure. HUD now owns the property.
-- HUD (the Department of Housing and Urban Development) is the agency that oversees the FHA loan program.
-- If a buyer makes a full price offer on a HUD home, they are able to buy the property with a down payment of only $100 if they get an FHA loan.
-- If they bid more than the listing price and want FHA financing, they have to pay any excess amount in cash.
-- A buyer does not have to get FHA financing to buy a HUD home. HUD does not care at all where the money comes from. They just want to sell the property.
-- HUD will pay up to 3% towards the buyer's closing costs and pre-paids. To get the 3%, you need to ask for it when you bid on the property.
-- Earnest money requirements are as follows: if the sales price is $49,999 or less, the earnest money is $500; if the sales price is $50,000 or more, the earnest money is $1,000.
-- If the buyer uses the FHA $100 down program and does not have to pay for any closing costs, they will be able to get their earnest money back at the closing (except for $100).
Do not let anyone try to talk your buyers out of getting FHA financing. The appraisal guidelines for FHA loans are a tiny bit more restrictive than they are for conventional loans, but there is hardly enough difference to avoid FHA loans. Some brokers who have "been in the business for years" have not kept up with the changes in the mortgage industry and are doing themselves and their clients a real disservice by avoiding FHA loans.
If a lender ever tells you to stay away from FHA loans, that probably means they are not approved to sell them. You should not use those lenders.
by Chris and Debbie Thomas
We've gotten a number of requests for information about HUD's $100 down deals in the past week, so here's a rundown of what you need to know:
-- A HUD home is a house that used to have an FHA loan, but it went into foreclosure. HUD now owns the property.
-- HUD (the Department of Housing and Urban Development) is the agency that oversees the FHA loan program.
-- If a buyer makes a full price offer on a HUD home, they are able to buy the property with a down payment of only $100 if they get an FHA loan.
-- If they bid more than the listing price and want FHA financing, they have to pay any excess amount in cash.
-- A buyer does not have to get FHA financing to buy a HUD home. HUD does not care at all where the money comes from. They just want to sell the property.
-- HUD will pay up to 3% towards the buyer's closing costs and pre-paids. To get the 3%, you need to ask for it when you bid on the property.
-- Earnest money requirements are as follows: if the sales price is $49,999 or less, the earnest money is $500; if the sales price is $50,000 or more, the earnest money is $1,000.
-- If the buyer uses the FHA $100 down program and does not have to pay for any closing costs, they will be able to get their earnest money back at the closing (except for $100).
Do not let anyone try to talk your buyers out of getting FHA financing. The appraisal guidelines for FHA loans are a tiny bit more restrictive than they are for conventional loans, but there is hardly enough difference to avoid FHA loans. Some brokers who have "been in the business for years" have not kept up with the changes in the mortgage industry and are doing themselves and their clients a real disservice by avoiding FHA loans.
If a lender ever tells you to stay away from FHA loans, that probably means they are not approved to sell them. You should not use those lenders.
Wednesday, June 2, 2010
Put Good Faith in New RESPA Rules for Clients
Business Building: Put Good Faith in New RESPA Rules for Clients
RISMEDIA, June 2, 2010--There has been some debate and confusion across the industry over the new RESPA rules from HUD that took effect Jan. 1 for lenders. While the key players iron out the wrinkles, you can focus on supporting the intent of the guidelines by bringing more clarity and transparency to your clients’ closings.
In November 2008, the Department of Housing and Urban Development added the new regulations to the Real Estate Settlement Procedures Act, including new Good Faith Estimate and HUD-1 forms, along with rules and timelines for their use. You may have noticed that some lenders implemented them last year. As of the first of this year, however, all lenders must comply with the new procedures for providing GFEs and transparent accounting of closing terms.
Your role as an adviser to buyers can include informing clients of their options and helping frame proper expectations from pre-approval to closing. That said, you should definitely understand these basic points in order to appropriately educate them:
3-day Rule
Lenders now must provide borrowers with a GFE within three days of receiving a loan application. HUD does allow lenders to provide general information worksheets in lieu of the GFE during the pre-approval process as long as no specific property is identified. If consumers ask for a GFE, however, one must be provided whether the borrow is ready to buy or not.
Fee Categories
The new GFE includes three categories of closing fees that your clients need to understand. They are (1) fees that cannot change at closing, such as origination fees (2) a group of charges that collectively can increase up to 10% only, such as government recording fees, and (3) costs that are permitted to change if a buyer chooses to shop around for services, such as homeowner’s insurance.
Checks and Balances
Consumers should confirm their lender’s compliance with the new RESPA rules by carefully reading and reviewing the GFE and HUD-1 forms. Remember, your expertise can be invaluable as buyers verify the fees and other information in preparation for their closing.
These items only scratch the surface of new RESPA rules and their impacts. HUD appears to be proactive in addressing any snags in the new process through Webinars and other training materials, and you can be proactive by taking advantage of these resources to expand your knowledge of the guidelines to better assist your clients. For more information, visit www.hud.gov/respa or search “RESPA” at www.realtor.org.
Margaret Kelly (CRB) is Chief Executive Officer of RE/MAX International, Inc. For more information, visit remax.com.
RISMEDIA, June 2, 2010--There has been some debate and confusion across the industry over the new RESPA rules from HUD that took effect Jan. 1 for lenders. While the key players iron out the wrinkles, you can focus on supporting the intent of the guidelines by bringing more clarity and transparency to your clients’ closings.
In November 2008, the Department of Housing and Urban Development added the new regulations to the Real Estate Settlement Procedures Act, including new Good Faith Estimate and HUD-1 forms, along with rules and timelines for their use. You may have noticed that some lenders implemented them last year. As of the first of this year, however, all lenders must comply with the new procedures for providing GFEs and transparent accounting of closing terms.
Your role as an adviser to buyers can include informing clients of their options and helping frame proper expectations from pre-approval to closing. That said, you should definitely understand these basic points in order to appropriately educate them:
3-day Rule
Lenders now must provide borrowers with a GFE within three days of receiving a loan application. HUD does allow lenders to provide general information worksheets in lieu of the GFE during the pre-approval process as long as no specific property is identified. If consumers ask for a GFE, however, one must be provided whether the borrow is ready to buy or not.
Fee Categories
The new GFE includes three categories of closing fees that your clients need to understand. They are (1) fees that cannot change at closing, such as origination fees (2) a group of charges that collectively can increase up to 10% only, such as government recording fees, and (3) costs that are permitted to change if a buyer chooses to shop around for services, such as homeowner’s insurance.
Checks and Balances
Consumers should confirm their lender’s compliance with the new RESPA rules by carefully reading and reviewing the GFE and HUD-1 forms. Remember, your expertise can be invaluable as buyers verify the fees and other information in preparation for their closing.
These items only scratch the surface of new RESPA rules and their impacts. HUD appears to be proactive in addressing any snags in the new process through Webinars and other training materials, and you can be proactive by taking advantage of these resources to expand your knowledge of the guidelines to better assist your clients. For more information, visit www.hud.gov/respa or search “RESPA” at www.realtor.org.
Margaret Kelly (CRB) is Chief Executive Officer of RE/MAX International, Inc. For more information, visit remax.com.
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