Mortgage loan

What Is A HUD Home?

Who is Eligible to Buy a HUD Home?

The HUDHomeStore  is the listing site for HUD real estate owned (REO) single-family homes and 1-4 Unit Multifamily properties. This site provides the public, brokers, potential owner-occupants, state and local governments and nonprofit organizations a centralized location to search the inventory of HUD properties for sale.

Since the FHA has guaranteed the loan on behalf of the federal government, when the foreclosure process is completed, FHA pays off the lender of record and it goes back to HUD as the responsible party for all FHA insured loans. HUD homes are then put for sale at the current market rate with the aim of selling it off quickly and recovering the money. It in fact offers a good option for those looking to buy HUD homes. There are many programs for discounted purchases (these will be covered in another article.)

HUD will sell the property using a HUD broker though a bidding process.

In order to buy HUD homes, one can purchase only through real estate agents approved by the U.S. Department of Housing and Urban Development. Approved agents can submit bids on behalf of the buyer

Owner occupants rank above nonprofits and government agencies in the bid-selection process for Exclusive and Extended listings. During the first 30 days that a FHA foreclosure is listed for sale, only owner-occupants are permitted to place bids; if a successful bid is not accepted by the time the initial priority period has elapsed, bidding is opened to investors.

Home buyers are motivated to buy HUD homes because they are listed at or below market value and it offers them the opportunity to purchase a home than they might not normally be able to purchase.

HUD does not provide home loans directly to buyers; you need to negotiate your loan with a lender or bank of your choice. Buyers must have a letter of pre-approval from a mortgage lender or cash with proof of funds.

The agent will be notified within 48 hours of an accepted bid. The settlement or escrow stage is usually completed within one to two months, during which time financing is arranged and the sale is closed. As in the case of a normal real estate transaction, if you do not close by the 55-Inspectingsettlement date, your earnest money deposit is forfeited or you will have to pay a per Diem fee until the close of the sale.

The Federal Housing Administration does not guarantee the condition of its properties and will not pay for the correction of defects. Because the new owner will be responsible for making needed repairs, HUD strongly urges every potential home buyer to get a professional inspection prior to submitting an offer.

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© 2018 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc ®. Equal Housing Opportunity. Privacy Policy Sherry Fields 1020 South Ave. W., Missoula, MT 59801 | Phone: (406) 207-8448 | Email: Sherry.Fields@bhhsmt.com
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Fannie Mae & Freddie Mac In the News

Latest Real Estate News

Statistics are showing more buyer confidence. A January 2014 Housing Survey revealed:

  • 52% of respondents thought it would be easy for them to get a home mortgage today
  • 70% of respondents said they would buy if they were going to move

In other news today …

English: An example of a real estate owned pro...
English: An example of a real estate owned property in San Diego, California. (Photo credit: Wikipedia)

 

New Report Critical Of Fannie Mae And Freddie Mac Fee Collection

A report released Wednesday by the Federal Housing Finance Agency (FHFA) was critical of Fannie Mae and Freddie Mac’s collection of late fees. The report criticized the two for poor management of late fee collection, noting large sums of money either not being consistently collected or collected at all. »READ MORE

Bank Of America To Cut More Mortgage Jobs

Bank of America, the second-largest U.S. lender, is cutting 450 mortgage jobs from its West Coast Offices. The lending giant is reducing staff after new loans fell short of internal forecasts. In a report by Bloomberg, affected employees were told yesterday that workers involved in processing home loans would be let go. »READ MORE

Housing Inventory Continues Fall In January

January marks another decline in home inventory, according to a report issued by Redfin. With the caveat that “it is too soon to tell,” the brokerage did offer some optimism regarding inventory in coming months, revealing “Redfin agents report that most of their home selling clients are planning to list between March and May.” »READ MORE

Fannie Mae Increases Incentives To Purchase REO Properties

Fannie Mae announced Thursday that homebuyers can now receive up to 3.5 percent in closing cost assistance. The help is available within the FirstLook period of Fannie Mae’s HomePath properties in 27 states. The incentive will offer qualified buyers up to 3.5 percent of the final sales price to pay closing costs. »READ MORE

 

 

 

 

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© 2018 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc ®. Equal Housing Opportunity. Privacy Policy Sherry Fields 1020 South Ave. W., Missoula, MT 59801 | Phone: (406) 207-8448 | Email: Sherry.Fields@bhhsmt.com
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Controversy Continues Over Rising Home Prices

Once again lending practices have eased up. The Federal Reserve in a recent survey of Senior loan officers showed: an average of 4.6 percent of lenders surveyed acknowledged easing lending standards for prime residential loans and 16 percent of lenders surveyed reported an increase in demand for loans to subprime borrowers

The 2013 numbers on housing and the economy look eerily similar to 2005, the year before the housing bubble burst brought the economy down with it. While some of the 2013 numbers look better than 2005, other coincidental indicators are reason for concern. The falloff at furniture and appliance stores suggests homeowners may be stretched to make monthly mortgage payments–even in an era, until recently, of low mortgage rates. » Read More

alt="Sherry Fields Real Estate

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© 2018 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc ®. Equal Housing Opportunity. Privacy Policy Sherry Fields 1020 South Ave. W., Missoula, MT 59801 | Phone: (406) 207-8448 | Email: Sherry.Fields@bhhsmt.com
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Finally Some Good News For Those Who Have Had A Foreclosure

Logo of the Federal Housing Administration.
Logo of the Federal Housing Administration. (Photo credit: Wikipedia)

Finally, someone in Washington is recognizing that the vast majority of homeowners hit with this housing foreclosure/short sale crisis were the victims in all of this. Yes they defaulted on their payments, but almost always there were extenuating circumstances.  More often than not they were sold a loan that the lender knew was the wrong product but sold it anyway and when anything when financially wrong – health, job, divorce even death – they were in trouble.

I am glad to see that they will allow those that re-establish their credit scores can re-apply for homeownership after 12 months.

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.


 

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond their control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

Transunion Credit Score
Transunion Credit Score (Photo credit: i am real estate photographer)

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.

 

 

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© 2018 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc ®. Equal Housing Opportunity. Privacy Policy Sherry Fields 1020 South Ave. W., Missoula, MT 59801 | Phone: (406) 207-8448 | Email: Sherry.Fields@bhhsmt.com
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