hud-1 question
Aren't hud properties first auctioned at sheriffs sale first and then if no bids are placed then listed by hud for everyone to bid on? what advantage would i have on bidding at the auction versus waiting for it to be listed? ( besides not being able to inspect it) will the price be cheaper once it gets listed? 
No hud homes make it to the sheriff sale i beleave all hud homes go though MCB,INC. out of Huntington Beach CA. as i just finished makeing an offer on one. hope i was a little help.
thx for your quick reply. i'm in nj so they go through firstpreston management.
im sorry i did some checking and they do appear to go to the sale first
thx, i thought they did go through the sheriffs sale first. which makes me wonder why aren't these homes purchased at sheriffs auction? maybe the outstanding judgement/loans,atty fees..etc are to high? therefore there must be some re-evalution of price when they get listed by hud.
HUD does not make the loans, they guarentee the loans. Other lenders actually make the loans, but when they foreclose, HUD will get the home because of its guarentee (basically buying the home from the lender).
Almost all lenders at the foreclosure auction will bid the full amount of the outstanding loan plus all late penalties and attorney fees. This usually puts properties higher than most investors want to pay.
Roger
Quote:
On 2003-06-06 08:00, rajwarrior wrote:
HUD does not make the loans, they guarentee the loans. Other lenders actually make the loans, but when they foreclose, HUD will get the home because of its guarentee (basically buying the home from the lender).
Almost all lenders at the foreclosure auction will bid the full amount of the outstanding loan plus all late penalties and attorney fees. This usually puts properties higher than most investors want to pay.
Roger
thx Roger! so most likely when hud gets it they would have to reduce it somewhat just below market value. right?
HUD will usually price a home at whatever they think that the FMV is at the time in it's current condition.
They list it first to owner-occupants only and after a certain time period open the bidding to anybody (investors). They usually don't take any offers not close to the price. However, after a time, they will reduce their price, sometimes even lower than previous offers.
If you're considering buying HUD homes, you'll need a RE agent that is experienced in it. You have to use an agent to purchase a HUD home and the agent can give you more detailed info.
Good luck
Roger
thx again Rodger i really appreciate your feedback. I guess these home garanteed buy hud or pmi are not the best deals at time of sheriff sale. ? How would you know at time of sheriff sale wether the home is secured by hud or pmi?
i dont no if you would no if hud is involved at the sale but just look at the thats in front of you. there was a hud home that i made an offer for a couple after it was listed for $90,000 on the 1st day they bid $97,000 we look at it 3 days later seen there was a few people that was looking at it . so the put another bid in at $106,000 in witch they won the bid . and at that they stole the home for that price.
No you don't know if HUD is involved at the foreclosure sale. I personally don't think that buying at the sale is the best way to go. It is a high risk buy because you haven't seen the interior, and the homeowner could STILL be in the home AFTER the sale, forcing you to spend more money on eviction.
It also requires capital, a minumim of 10% down the day of the sale (nonrefundable) and balance within 30 days. You can't be playing around with getting a loan within that time frame.
Add to all this, in some states, the homeowner as a redemption period where they can buy the property back, whether it has been sold or not. I wouldn't want my money tied up for six months to a year waiting to see if the homeowner reclaims their property.
The investors who purchase properties at the sale are usually very experienced and have the money to lose if it goes bad (good place to find investors to sale to, birddog for though ).
Starting out, I'd either wait to the bank has it and puts it up for sale (easiest, IMHO) or start with the homeowner BEFORE the sale.
Good luck,
Roger
thx Rodger! In NJ we have a 10 day redemption period. Also at the time of sale they (sheriff) require 20% down and the balance in 2 weeks. I would only purchase a property like this when i'm at least able to view the property from the outside (view through windows) and know that no one is living there. As far as the interior i would have to just take into consideration that i may have to replace the heating/air conditioning units, some electrical, cabinets and so forth. these items will be worked in my numbers to make sure i still have a decent profit. if any of the above items work well then it would be more profit for me. note: i would not make any repairs until after the 10days.
Quote:HUD does not make the loans, they guarentee the loans. Other lenders actually make the loans, but when they foreclose, HUD will get the home because of its guarentee (basically buying the home from the lender).
Just as a point of clarification, VA loans are guaranteed. While HUD does not guarantee loans, they insure them through their Mutual Mortgage Insurance (MMI) program.
If the lender acquires title to the property at the foreclosure sale, HUD receives title to the property when they settle a lender's MMI claim.
What is the question regarding the HUD-1?[ Edited by DaveT on Date 06/07/2003 ]
hi dave t, my error in question..not hud-1 question just hud owned property question. (those loan documents where on my mind). thx
FYI: Just my 2 cents. The period that the properties are available to owner occupant purchasers is 10 days; after the initial 10 day period if the property is still on the market it is open to daily bids to all purchasers. HUD can also reduce the price at that point.
thx Jorge, your right , Hud will evaluate the bids by owner occupants at the end of 5 days and if no reasonable offer will again look at all owner occupant bids the next 5 days. on the 11th day its open to investors and anyone else. also if the highest bids is a tie between the owner occupant and investor then the owner occupant will win.