FHA SHORT SALE

Is there a difference when it comes to doing a short sale on a fha loan????

Comments(8)

  • mcldavid16th January, 2004

    REGINALDM11,
    This is reading only..someone else may have actual experience.. so this is from the " book" 1) FHA actively encourages lenders to "mitigate" with the borrowers to " keep them in their homes and the cost of foreclosures at a minimum ". FHA provides lenders with a monetary incentive when a lender works out a solution with a borrower.... OK .. now if the loss mitigation rep. (of lender) is being uncooperative ask if FANNIE MAE or FREDDIE MAC guarantees the loan. IF they say yes , politely hang up and call
    Fannie Mae (800) 732.6643 or Freddie Mac (800)373.3343
    The chapter goes on to explain that basically it's the same short sale presentation with the lender (if the lender is receptive to a short sale) as any other transaction.
    Let's see if another response can shed some light , I'm interested also..... mcldavid

  • martin1g3rd February, 2004

    mcldavid,

    It sounds like you have a valuable resource. What book/course are you reading from, and do you know where we can purchase one for ourselves?

    Martin

  • bginvestor3rd February, 2004

    I suggest looking into the short sale premier here at the TCI store.

    It has been a tremendous help for me in starting with short sales.

    Good investing!

    Bginvestor

  • BAMZ3rd February, 2004

    Hi REGINALDM11,

    When shorting an FHA loan, you would prepare your proposal for the short the same way that you would for any kind of loan. There are some differences in an FHA note, such as the amount that they may discount from the BPO, and other slight rules such as: If it is a vacant house and the lender finds out, they will not short sale the loan. The bank will walk a fine line with these to guarantee their investment back.

    BAMZ

  • Storm337th February, 2004

    BAMZ, I'm currently doing a short on an FHA loan, and learned about the vacancy rule in this forum. The property is vacant, the lender knows about it, and is proceeding anyway. (they are a large mortgage company, too!)

    I really thought this was a dead deal, but the lender ordered the title work and appraisal knowing full well that the house is vacant. I met the guy at the house for the appraisal yesterday.

    I'm still skeptical about this one, but going through the motions in case it pans out. We may get by with this one, because the homeowner vacated the property due to terroristic threats made by someone in the collections department for the mortgage company.

    I'll let everyone know how it turns out.

    Storm

  • BAMZ7th February, 2004

    Hi Storm,

    That is very interesting that the bank is aware of the Vacancy, yet there are still moving forward with the short process.

    I guess that just goes to show you that there are very little Absolutes in this business! Let us know how things move forward!

    Best of Success!

    BAMZ

  • Storm3327th October, 2004

    I've been off the forum for quite a while, but wanted to drop back in to say that I did successfully close a double short sale where the homeowner had vacated the property. The first was FHA, and the lender knew the homeowner had moved out. So, FWIW - it can happen. I wouldn't go so far to say that it can happen every time, but it did this time.

    Cheers,

    Storm

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