The Truths About FHA's
I've heard where FHA's were difficult to do a short sale on, however, has anyone ever taken a FHA over subject to? I know of so many investor's who won't go near a house with an FHA on it, do they scare any of you?
Now, I'm pretty new at this, but why would something with FHA on it scare someone away?
It being a govenment issued loan, there are different rules. I've heard "so called" horror stories where they would send someone out to the house just to make sure that person on the mortgage is still in the house. I don't know how true this is, but some people shy away from FHA's.
FHA insured loans require a bit more work to short... especially if there are any junior mortgages. Just like anything else, if you know your way around, it shouldn't frighten anyone. But, if you don't know the ropes... then you have every reason to be apprensive.
Why would FHA-insured lender agree to a short sale? If the loan is FHA-insured, they stand to get full value from insurance - so why would they agree to take less from a short-seller?
Why? Because, as a compelling Short Sale Proposal will indicate, it's in their best financial interest to do so. HUD doesn't need another REO in their inventory.
Look for more relaxed standards as the numbers of foreclosures increase.
So there is no problems sub toing a FHA.
That's quite a leap! For the most part, transactional problems for beginners occur when they illadvisedly try to combine acquisition techniques. For example, some might think that it's possible to Sub2 a short.
The best advice: KISS
[ Edited by TheShortSalePro on Date 10/26/2003 ]
I'm not trying to short, I try to focus on Sub To. I was just wondering if anyone ever experienced problems sub toing a FHA.
I noticed on one of your previous posts you mentioned that you use land trusts in your sub2 deals. I would think that using a land trust on an FHA deal would eliminate most of the risk. Seems that it wouldn't be that big of a deal. Your smart to ask though, CYA is always a good technique.
Andy
I have only had a problem with an FHA insured loan one time. It was caused by the ex husband of the lady from whom I bought the house.
Seems this clown prior to leaving his conubial bliss. Tried to talk the lender into reducing the amount due, the interest rate and the payment. If I remember correctly he wanted to go to a 50 year payoff. You can imagine how much luck he had trying that one.
Shortly afterwards the big light bulb went off and she thru him out the door and piled his clothing besides him. Of course she gave him a choice to either sign the Quit Claim Deed, or Die.
Her eldest son then contacted me and I bought her position of ownership in exchange for two years prepaid rent in a condo and the use of my small VW Diesel Pickup Truck to help her move. She returned the truck with a large gash on the side, a broken off side mirror and a total lack of cooling fluid. Seems she took the top off to check and left it off.
The Ex husband annoyed by his sudden divorce from a source of steady income. Went to the lender, explained that he was no longer on title and that a person of evil intent was now the new owner.
A nice young man newly flunked out of Yale showed up at the property where a crew was busy painting and replacing the front door, two windows and a fractured toilet. I never got a proper explanation of that. The golf ball found in the Weir of the toilet was really puzzeling. I understand a love of the game is one thing, but this! Too much.
We explained the transfer and informed him we stood by for any instruction the lender choose to communicate.
I never heard from them again. I have a feeling that the ex Yaley gave a report that the lender had gained by the transfer of title.
I hope this is helpfull, yes I did buy that nice man a drink or two and I did sing."Bull Dog Bull Dog Elii Yale." Off key.
that is until the Bar Keep a lady of considerable width asked us to leave as her small dog had started to join in the singing. I do not know if the dog was a Yalley, but he had a lovely lovely high C flat howl.
Cheers Lucius