Saturday, August 1, 2009

Trying a Sacramento FHA Short Sale?

Many Sacramento agents do not know the difference between the requirements for doing a short sale for an FHA loan vs. a conventional or conforming loan.

Even though FHA loans were not common during the peak of the market, many buyers who purchased homes after early 2007 did use FHA loans, and unfortunately some of those folks are needing short sale assistance due to job loss, state furlough, divorce, etc.

Let me just explain - these are much different than a non-FHA short sale. These short sales do go through the seller's lender, but must go through HUD (US Department of Housing and Urban Development) and require a HUD application for "Pre-Foreclosure Sale" to be submitted, and a special consumer financial counseling certificate.

If you have an FHA loan and are thinking about doing a short sale, be sure to inquire about the above mentioned items...if you fail to complete those additional requirements initially, your short sale could be destined for failure. If you are engaged in an FHA short sale, be sure to make sure you and your agent are on top of the additional HUD requirements. Be sure to request the correct FHA-specific items from your lender's loss mitigation department...and keep in mind, they may not even know the difference until you get to a more advanced phase of the short sale negotiation.

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