short sale HUD counseling requirement - Posted by James (fl)

import · September 24, 2003, 1:32am

Posted by MattFL on September 24, 2003 at 07:18:18:

Hey Jim,
Are you dealing directly with Chase Manhattan or with a third party company like First American Loss Mitigation Services? I’ve ran into this problem before. Look up in your phone book for a HUD counseling office. See how long it will take to schedule an appointment with a HUD counselor and your seller. Most likely it will take too long. Call your contact with the lender and let them know that you have everything completed to satisfy the short sale packet, except for the HUD Homeownership Counseling Certificate. Tell them that your seller has been trying to schedule an appointment, but due to the overwhelming number of foreclosures, the HUD office is extremely backed up. Let the lender know you have a buyer that will be ready to close at whatever date you need. Most likely they will just tell you to just go ahead and submit your short sale packet anyway. When you do, be sure to include in your cover page or where ever you put your message that you “formally request a postponement of the foreclosure auction date. You have a buyer that will be ready to close on xx/xx/xx… Please see that the postponement of the auction extends throuth this date.” If the BPO has not been done yet, then make sure you ask for a long enough postponement to allow them to do one (at least two weeks extra).
As far as the Realtor, find another one. Tell the next Realtor that he or she will get paid at closing like any other deal. Also, find out what the maximum % the lender allows for the Realtor. There will be no other Realtor, and they are not doing anything but listing it on the MLS, so find one that will put half of that full commission back in your pocket after closing. Good luck!

-MattFL

import · September 24, 2003, 1:32am

short sale HUD counseling requirement - Posted by James (fl)

Posted by James (fl) on September 24, 2003 at 01:32:32:

I am currently trying top put together a short sale package for Chase Manhattan. One of their requirements is that the homeowners attend a homeownership counseling with a HUD approved lender. Does anyone knwo what this is or whether or not it can be avoided for the short sale? I do not want to ask chase as to not seem like i do not know what i am doing, but honestly, i do not know what this is. I believe i have a good chance at getting a good deal on this home. Also, the other requirement is that the home be listed in MLS. I ran it by one realtor, to list it but not have to show it or anything, and he wanted $1K up front. I am not paying 1K up fron on a house i might not even be able to purchase if Chase does not accept a short sale. Should I have the homeowners ask a realtor to list it for what they owe as/is? The home is in horrible shape and will NEVER get what they owe. Does anyone know how I can get around these two issues? Having the house listed and having the homeowners attend a counseling session (i dont even know how to get them to attend a session). The homeowners do not want to, they would rather just let it go to auction than jump through HOOPS as they say, but are willing to work with me to buy their home at a substantial discount. They have already moved out of the house due to the impending auction sale. the house was due to be sold 9-8-03 but got postponed because the courts did not properly post it in the paper or something to that affect, and the new sale date is 10-9-03 so i need to move quickly. Any and all help will be greatly appreciated. Thank You

Jim in FL

import · September 24, 2003, 7:27am

Re: short sale HUD counseling requirement - Posted by rm

Posted by rm on September 24, 2003 at 07:27:46:

>>Does anyone knwo what this is or whether or not it can be avoided for the short sale?>>

Skip it. They’ll have a form for the seller to sign that says that they received counseling. Big deal. The first time I encountered this, I asked the lender, “What the heck is HUD counseling?” Turns out, they weren’t too familiar with it either. I said, "Listen, we don’t have time to go hunt down a HUD-approved counselor, and we wouldn’t know one if we saw one. They said, “Just have them sign the form.” I said ok.

>>Also, the other requirement is that the home be listed in MLS.>>

I made this mistake twice. All it does it adds expense to the deal. I skip this and tell the lender that there’s no time to list the property, and there’s no room in the deal to pay a realtor’s fee. “If it has to be listed, then you’ve lost you’re only interested party.”

>>The homeowners do not want to, they would rather just let it go to auction than jump through HOOPS as they say, but are willing to work with me to buy their home at a substantial discount. They have already moved out of the house due to the impending auction sale.>>

I don’t know FL’s timeline, but I feel that having the home vacant while negotiating hurts your leverage… although here in MI, we have a 6-month redemption.

If they feel that going to HUD counseling and listing the home is “jumping through too many hoops,” just wait until they see all the financial docs they have to provide, and all the forms they have to sign.

Good luck.