FHA Foreclosures
Are FHA Loans insured by the govt.? I believe they are but I'm not 100% sure. I have an FHA foreclosure deal on my hands and I'm trying to decide what to do with it - whether it would be worth my while doing a shortsale and wholesale or whether it would be a waste of time trying to shortsale it and I should find other avenues of acquiring then disposing the property.
FHA Loans are insured by the government.
If an owner does not make payments, the home is foreclosed.
If no one bid at the foreclosure sale, it goes back to the lender.
The lender is guaranteed $$ by the government.
The home then becomes a HUD (Housing and Urban Development) home and is placed on the market.
Hope This Helps!
Mrs. Meltzer
Just as I thought. Thanks for the reply MrsMeltzer
Mrs. Meltzer, you are a sharp cookie. You are absolutely right and this is one reason most lenders will not accept short sales on FHA loans. They would rather foreclosure and get paid by the government.
That's true - it's a waste of time trying to shortsale FHA/VA loans except in rare circumstances (never say never). Anyway, I want to thank you both for your insight.
While it's true that FHA shorts are a bit more complex, they can be very rewarding. I enjoy pouring over and identifying potential loan servicing errors that could negate or reduce the servicers' recovery via their claim for FHA mortgage insurance. With their security blanket at risk... they can become much more agreeable.
TheShortSale Pro,
I have never heard of this "Loan Servicing Error". Can you give us an example?
Thanks,
Mrs. Meltzer