Wendy RulnickIt's Wendy... It's Sold!

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 HUD PFS Short Sale Option -

Non-owner occupants must have a credit score 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 HUD PFS Short Sale 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 an un-related Realtor.

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

Finally, you may be able to buy within a year after doing and FHA HUD short sale. A HUD program called "Back to Work" offers you the opportunity to purchase another home once your finances are in order again. More questions or ready to list your FHA HUD short sale? Give me a call!

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204