Do you have an FHA HUD mortgage and live on the Emerald Coast of Florida? If you do and have problems making your payments, HUD has new short sale program changes that might help you. Here is a summary:

There are now two options for a HUD Pre Foreclosure Sale (PFS), which is a HUD short sale. They  called the “Standard Option” and the “Streamlined Option”.

Streamlined PFS Option –

Non-owner occupants must have a credit score must be below 620 and be 90 days delinquent

Military Service Members, for example, from Eglin Air Force Base, Hurlburt Field

• You are PCSing more than 50 miles from your home to your new base
• Your home must have been your primary residence

Owner occupants must have a credit score below 620 and be 90 days late. Your file must also have been reviewed for home retention, which means keeping your home.  To qualify for the Streamlined Pre-foreclosure short sale in this case, you would have been found ineligible to retain your home, defaulted on a modification or Trial Payment Plan (with other restrictions), or have had a credit score below 580 and rejected the home retention option.

Standard PFS Option guidelines (if you do not qualify for the Streamlined PFS Option)  –

• Your mortgage payments are at least 31 days late at time of closing
• You have a risk of imminent default due to loss of income, your household financial circumstances change, death of co-borrower, disability, long-term illness, job transfer or relocation
• The servicer will analyze your finances by reviewing your pay stubs or other proof of income, tax returns, credit report, financial statement, bills, three most recent bank statements, etc.
• IMPORTANT: If you have cash reserves exceeding $5,000, you will have to contribute 20% of the balance of your funds which exceed $5,000. (So, if you had $25,000, you would have to contribute $4000).
• An FHA appraisal will be conducted and you will have four months (with a two month extension in some cases) to sell your property.
• The acceptable net proceeds from your sale are 88% for a contract between market days 1 and 30, 86% for contracts between days 31-60, 84% of the appraised value for a contract that comes later.
• You may be eligible to receive a cash incentive at closing of up to $3000, or $1500 for a non-owner occupied property, but only if you are not required to contribute to the loss because of your cash reserves status.
• A junior lien may receive $1500, and if more is necessary, you may contribute your cash incentive if applicable.

How do you find out if an FHA HUD pre foreclosure short sale is right for you? Start by calling your lender. Once they determine you are eligible, they will issue you an “Approval to Participate”.  You will have seven days to list your property with a Realtor.

Read the full FHA HUD pre foreclosure short sale program change guide.

More questions or ready to list your FHA HUD short sale? Give me a call!

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Short Sale Help

SHOULD YOU SHORT SALE OR STAY CALCULATOR

Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects of short sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more.  She is also co-founder of www.ShortSaleSuperstars.com and short sale instructor to agents across the United States. Wendy Rulnick sells real estate in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Panama City Beach, Eglin AFB, Hurlburt Field.

The post Major FHA HUD Pre Foreclosure Short Sale Changes first appeared on Rulnick Realty.

Approved Price:  $115,000

Approval Time:  108 DaysSince this was an FHA/HUD short sale, special procedures had to be followed.  The seller was required to write a letter explaining why the home was vacant.  FHA short sales typically require the owners to occupy the property.  In addition, because of the HUD short sale guidelines, the approval stated the sellers would receive $1000 upon closing.

Sales notes: 

Do you need to sell your FHA-insured home as a short sale?  Here is the updated summary of requirements for HUD Short Sales, also called “Pre-Foreclosure” Sales:

1. You must be delinquent 31 days or more at the time of sale.
2. You must list the property with an un-related Licensed Real Estate Broker
3. You must actively market the property for four months (up to six).For the first 30 days of marketing, the short sale lender (mortgagee) 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, the lender may only approve offers that will result in minimum net sale proceeds of 86% of the “as-is” appraised FMV. For the rest of the marketing time (60 days), the lender may only approve offers that will result in minimum net sale proceeds of 84% of the “as-is” appraised FMV.
4. The property must be an owner-occupied, except for cases of job transfer, death, divorce, job loss
5. There should be written proof of your decrease in income showing inability to pay the mortgage, job loss, etc.
6. HUD will pay up to 1% of buyer’s mortgage as part of closing costs if the new mortgage is also FHA, plus reasonable “seller” costs
7. HUD allows 6% Realtor commission
8. HUD will not pay for Home Warranties, points or lender’s title insurance
9. You must get approval to participate in the HUD Pre-Foreclosure Sale Program in advance
10. Upon acceptance into the program, you will be given Approval To Participate Form which will outline program restrictions

Here are details of the HUD Short Sale (Pre-Foreclosure) Sale Program.  Remember, these guidelines apply to FHA-insured loans only, and there may be some latitude in those requirements.  These guidelines are subject to change.

HUD Frequently Asked Short Sale Questions

For more information contact the HUD National Servicing Center. Contact me to help you with your short sale.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Crestview Florida Real Estate

Crestview Short Sales

Read Wendy’s Short Sale Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

The post Crestview Short Sale Approved By GMAC as HUD / FHA Short Sale first appeared on Rulnick Realty.

Do you need to sell your FHA-insured home as a Short Sale? Here is the updated summary of requirements for HUD Short Sales, also called “Pre-Foreclosure” Sales:

1. You must be delinquent 31 days or more at the time of sale.
2. You must list the property with an un-related Licensed Real Estate Broker
3. You must actively market the property for four months (up to six).For the first 30 days of marketing, the short sale lender (mortgagee) 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, the lender may only approve offers that will result in minimum net sale proceeds of 86% of the “as-is” appraised FMV. For the rest of the marketing time (60 days), the lender may only approve offers that will result in minimum net sale proceeds of 84% of the “as-is” appraised FMV.
4. The property must be an owner-occupied, except for cases of job transfer, death, divorce, job loss
5. There should be written proof of your decrease in income showing inability to pay the mortgage, job loss, etc.
6. HUD will pay up to 1% of buyer’s mortgage as part of closing costs if the new mortgage is also FHA, plus reasonable “seller” costs
7. HUD allows 6% Realtor commission
8. HUD will not pay for Home Warranties, points or lender’s title insurance
9. You must get approval to participate in the HUD Pre-Foreclosure Sale Program in advance
10. Upon acceptance into the program, you will be given Approval To Participate Form which will outline program restrictions

Here are details of the HUD Short Sale (Pre-Foreclosure) Sale Program.  Remember, these guidelines apply to FHA-insured loans only, and there may be some latitude in those requirements.  These guidelines are subject to change.

HUD Frequently Asked Short Sale Questions

For more information contact the HUD National Servicing Center, your lender, and an experienced Short Sale Specialist.

The post How to Sell Your HUD Short Sale Home first appeared on Rulnick Realty.

August 25, 2008 PREFORECLOSURE SALES PROGRAM

(Wendy’s Note: HUD uses the term “preforeclosure sale” for “Short Sale”.)

1. Sale must be an “arms length” transaction. *Wendy’s note: Arms length means independent parties,  e.g. not related, you cannot sell to your brother.
2. HUD will pay “all reasonable cost of the sale including up to 6% sales commission, local/state transfer tax stamp and other customary closing cost.”  *Wendy’s note: HUD site also states there is leeway regarding what is “customary”.
3. Appraised value of the short sale property must be at least 63% of the outstanding mortgage.
4. Net sales proceeds must be at least 82% of the property’s ” as is ” appraised value, defined as selling price minus sales commission, consideration paid to seller, max $1,000 to discharge any lien and customary sellers closing costs. *Wendy’s note: $1,000 is not very much to pay a junior lien in the current market.
5. The property must be owner-occupied, not vacated nor an investment property. Exceptions: if the seller can prove he had to move due to the hardship (job loss, transfer, divorce, death)
6. The seller must be 31 days delinquent or more at the time of the closing.
7. The seller must provide documentation of a reduction in income or an increase in living expense.
8. The seller must apply for the Preforeclosure Sale Program with an Application to Participate HUD-90036 along with lender-required financial documentation.
9. The lender must obtain a standard FHA appraisal from an appraiser who does not share any interest with the mortgagor or mortgagor ‘ s agent. The appraisal is valid for six months.
10. The lender must obtain a title search to verify that the title is not impaired with un-resolvable title problems or junior liens that cannot be discharged as allowed by HUD.
11. The seller must maintain the property until closing.
12. The seller must list the property with a licensed real estate broker, unrelated to the mortgagor. The listing agreement must include a specific cancellation clause in the event the terms of the sale are not acceptable to HUD.

This is by no means a complete re-cap of the HUD guidelines, but should provide some guidance to those with a HUD loan.

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