How HUD Foreclosure Bids are Placed
March 11, 2008
Placing a HUD foreclosure bid is a relatively simple process. Once you’ve chosen the foreclosure home you wish to purchase, let your realtor know the amount you wish to bid. He can instantly enter the bid into HUD’s online auction system.
Before bidding on any property, you must: fill out a simple form, give your real estate agent an earnest money deposit in the form of a certified check or money order ( generally between $500 and $1000) and submit a lender pre-approval or pre-qualification letter to your agent. If your bid is accepted, the agent will submit these materials to the appropriate HUD office.
See Also: How to Qualify for Bidding on HUD Repos
HUD Announces New Limits for FHA Mortgages
March 10, 2008
HUD recently announced new limits for FHA-insured mortgages. Many owner-occupant bidders on HUD foreclosure homes choose FHA financing due to low downpayment options and flexibility. The FHA 2039(k) loan, for example, gives borrowers the opportunity to take out money for home repairs as a part of the first mortgage.
Now, the new limits give borrowers the opportunity to purchase more expensive properties using FHA financing. In some areas (such as Los Angeles and New York) the limits are as high as $729,750.
Check out HUD’s database of new FHA mortgage limits here: FHA Mortgage Limit Website.
See Also: Guide to Bidding on HUD Foreclosure Homes
Who is Michaelson, Connor, & Boul?
March 4, 2008
Michaelson, Connor, & Boul, Inc. is a real estate asset management company contracted by the government to sell HUD homes in the following states:
- Arizona
- Colorado
- Michigan
- Montana
- Nevada
- Ohio
- Utah
- Wyoming
Michaelson, Connor, & Boul is the only company that can list HUD homes for sale in these states. However, as a bidder, you may bring your own buyer’s agent into a HUD transaction. You can view the Michaelson, Connor, & Boul database of HUD foreclosure properties on their website: Michaelson, Connor, and Boul.
If you’re considering purchasing a HUD property through Michaelson, Connor, & Boul, these resources can help: HUD Foreclosure Buying Guide, Working with HUD Approved Realtors.
Financing HUD Property Repairs
March 3, 2008
For a long time, the FHA 203(k) loan was one of the only ways to have a borrower could get money for HUD home repairs, without taking out an additional loan. The FHA 203(k) loan will lend the estimated value of the property post-repair. For example, if a property’s current value is $70,000, but it could be worth $100,000 if certain repairs are made, the borrower can get a loan for up to $100,000.
Now, a growing number of private lenders are offering tempting alternatives. Consider the Wells Fargo Home Asset Management Account. This loan combines a first mortgage with a home equity line of credit. The borrower is able to draw upon his equity in the form of a HELOC, without making multiple applications. As the equity grows, so does the HELOC limit. This makes it especially easy for a borrower to make repairs on his HUD home at a low interest rate.
Keep checking back, we’ll soon have a new section on financing HUD foreclosure homes.
See Also: Where to Find HUD Homes for Sale
HUD Secretary Advocates for Lower Down Payments on FHA Mortgages
February 28, 2008
HUD Secretary Alphonso Jackson recently sent a letter to Congress, urging them to approve lower down payments on FHA-insured loans. FHAloanpros.com explains:
“Specifically, Mr. Jackson advocated for, among other things, “flexible down payment options.” HUD clarified “flexible down payment options” to mean cutting in half the current FHA down payment requirement of 3% to 1.5%.”
There’s no guarantee that a bill like this will pass. However, if it does it could make it extremely easy for homebuyers to purchase HUD homes for sale.
See Also: HUD Foreclosure Guide
HUD Ends Broker “Kickback” Program
February 25, 2008
Last week, HUD announced that the end of their broker incentive program. For the last three months, HUD has been offering $500 bonuses to real estate brokers who convince clients buying HUD foreclosure properties to use FHA financing.
The program came under scrutiny when a Michigan attorney claimed that the incentive program constituted an illegal “kickback”.
Freep.com reports:
“HUD awarded the $500 bonus to about 200 brokers since November, including 67 in Michigan, said HUD spokesman Brian Sullivan.
Under RESPA, anyone who awards kickbacks for referrals can face fines up to $10,000 and a possible 1-year prison sentence, said Sullivan. Often out-of-court settlement agreements are made, he said.”
After ending the old program, HUD announced a new incentive that awards the $500 to real estate brokers who sell a HUD home - regardless of whether or not their client chooses an FHA-insured loan.
Who is Hooks Van Holm, Inc.?
February 22, 2008
Hooks Van Holm, Inc. is a real estate asset management company contracted by the government to sell HUD homes in the following states:
- Alabama
- Delaware
- Mississippi
- Pennsylvania
Hooks Van Holm, Inc. is the only company that can list HUD homes for sale in these states. However, as a bidder, you may bring your own buyer’s agent into a HUD transaction. You can view the Hooks Van Holm, Inc. database of HUD foreclosure properties on their website: Hooks Van Holm, Inc.
If you’re considering purchasing a HUD property through Hooks Van Holm, these resources can help: HUD Foreclosure Buying Guide, Working with HUD Approved Realtors.
Q: Do I need a low income to purchase a HUD foreclosure home?
February 21, 2008
No. While many HUD foreclosure homes can be purchased at below-market prices, these properties are available to anyone who can afford them. Owner-occupant bidders get the first opportunity to purchase HUD foreclosure homes. If no owner-occupant bid is accepted, the auction is opened up to investors.
20+ Most Common Questions About HUD Homes for Sale
February 20, 2008
Can I make a low-ball bid or barter on a HUD home? Do some HUD homes actually sell for $1? Who pays the HUD agent’s commission?
If you have questions like these, check out the new list of HUD Foreclosure FAQs for Homebuyers. You’ll find answers to over twenty of the most-asked HUD questions.
HUD Asks Congress for Flexibility on FHA Pricing
February 19, 2008
This month, HUD urged Congress to allow them more flexibility when pricing FHA loans. Business Week explains:
“The Department of Housing and Urban Development warned U.S. lawmakers Monday that the Federal Housing Administration could face financial difficulty if Congress limits its ability to charge higher premiums to riskier borrowers.
“FHA will move ever closer toward financial insolvency, given the uncertainty and volatility in today’s mortgage market if forced to continue its current premium structure,” HUD Secretary Alphonso Jackson said in a letter sent Monday.”
HUD wants the freedom to raise rates for risky-borrowers. Congress, on the other hand, says they’re promoting housing availability by limiting the amount FHA borrowers can be charged and keeping down payment minimums low.
If you’re an owner-occupant bidder, securing FHA-insured financing is a smart way to save money (and even take out money for repairs in the case of the 203(k) loan). See: Secrets of HUD Foreclosures.