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MASTERING HUD HOMES

MASTERING HUD HOMES. WILLIAM BUSTOS 801.858.3156. OVERVIEW. MORTGAGEE COMPLIANCE MANAGER (MCM). Ensures HUD’s interests are protected Performs pre and post conveyance services Conveyance condition Ensure marketable title Claims and conveyance guidance. FIELD SERVICES MANAGER (FSM).

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MASTERING HUD HOMES

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  1. MASTERING HUDHOMES WILLIAM BUSTOS 801.858.3156

  2. OVERVIEW

  3. MORTGAGEE COMPLIANCE MANAGER (MCM) • Ensures HUD’s interests are protected • Performs pre and post conveyance services • Conveyance condition • Ensure marketable title • Claims and conveyance guidance

  4. FIELD SERVICES MANAGER (FSM)

  5. ASSET MANAGER (AM) GOAL: OVERALL CUSTOMER SATISFACTION

  6. WHO IS THE LLB?

  7. SO, WHAT IS A HUD HOME?

  8. It’s NOT low-end housing! • 1-4 unit single-family home • Vary in price, location & condition • HUD Homes are sold all over the state • Some are move-in ready, others are not • List prices are based on a recent appraisal

  9. UNDERSTANDING AND DEFINING AS-IS • No warranties, guarantees, or representations about the property • No repairs!!! • Exception: Security, Safety and Vandalism while Under-Contract • Buyers should still conduct and are encouraged to complete a home inspection.

  10. BUYER TYPES

  11. BUYERS WILL FALL INTO 1 OF 4 CATEGORIES

  12. OWNER OCCUPANTS • Given priority during certain cycles • Must occupy house for 1 year • CANNOT participate in HUD sales for 2 years as Owner Occupant

  13. INVESTORS • CANNOT bid until day 31 • No restriction on quantity

  14. SPECIAL PROGRAMS OFFERED BY HUD

  15. HUD’S SPECIAL PROGRAMS • Properties which are eligible for HUD’s special programs will be listed to a “Lottery Period” prior to being listed for sales on www.HUDHOMESTORE.com • Two types of lottery period eligible bidders • GNND – Good Neighbors Next Door • Eligibility will be indicated on listing • HUD approved Non-Profits/Gov’t Agencies • Information on becoming approved is at www.hud.gov

  16. GOOD NEIGHBOR NEXT DOOR • Discounts offered to Firefighters, EMT’s, Police, and Teachers • 50% off property list price • $100 down payment • Requirements: • Designated Revitalization Area • Reside in home for at least 36 months • Buyer nor spouse may have owned title to property in last 12 months • Cannot have participated in GNND program in the past

  17. ADDITIONAL GNND INFORMATION • Must bid 100% of listing price • Any type of financing or cash deal • Must qualify for entire contract amount prior to discount • FHA Financing • Must qualify for entire contract amount prior to discount • All closing costs may be considered into mortgage • HUD does not pay closing costs or commissions on these programs

  18. GETTING STARTED

  19. REGISTERING WITH HUD

  20. BROKER REGISTRATION PACKAGE

  21. CREATE A SELLING AGENT ACCOUNT • Easy and free! • Need brokerage’s active NAID # to set up account • Log into this account later when you are in the bidding process • Register as Bidder in top right corner • Principal Broker must be set up prior

  22. MARKETING PERIODS • Lottery Properties • New Listings • Uninsurable Properties PROPERTIES CAN LIST DAILY!

  23. LOTTERY PROPERTIES • 5 day period for special buyer types • 7 days in total

  24. NEW LISTINGS • Insurable / Insurable with Escrow • 30 day exclusive owner occupant bidding period • Sealed = Bids will accumulate over the entire length of the: • Bidding period and will be reviewed the 10th day of this period • 20 days daily bidding • All bidders allowed on day 31

  25. UNINSURABLE PROPERTIES • 5 days sealed exclusive owner occupant bidding period • All bidders allowed on day 6

  26. FINANCING CODES

  27. LOCK BOXES • HUD requires a Lock Box be placed on every HUD home • Report missing keys to LLB

  28. QUESTION: I DON’T HAVE A LOCK BOX KEY, CAN I STILL HAVE ACCESS?

  29. ADVERTISING

  30. SHOWING AND ADVERTISING HUD HOMES • Any registered selling agent can show and advertise any available HUD property • Must adhere to advertising/showing guidelines • Non-compliance could result in participating brokerage’s NAID number being suspended!

  31. ADVERTISING REGULATIONS

  32. ADVERTISING REGULATIONS

  33. AND LASTLY…

  34. OFFERS

  35. COMPLETE THE SALES CONTRACT PACKAGE WITH YOUR BUYER BEFORE YOU PLACE A BID! • Buyer’s signature is your permission to place a bid on their behalf • If offer is accepted, you only have two (2) business days to submit the entire contract package with Earnest Money, Pre-Qual, etc.

  36. Form 9548

  37. THE HUD SALES CONTRACT PACKAGE

  38. FHA AMENDATORY CLAUSE • Will not be executed on HUD Sales • Addendum not required; HUD Homes are exempt from the clause

  39. DO NOT LET CONTRACT EXPIRE!!! Buyer automatically losses Earnest Money EARNEST MONEY

  40. SUBMITTING A BID

  41. THE HUD HOME BIDDING PROCESS • HUD Homes are sold via an online electronic bidding process • Owner-occupants receive priority for a given amount of time • Agents must submit bids on a buyers behalf

  42. FACTOIDS ABOUT OFFERS

  43. BIDDING OVER THE “AS-IS” VALUE • The “As-Is” value = appraised value • You can NOT get a 2nd appraisal when obtaining a FHA loan • If bidding over the list price, buyer needs to fund the difference in cash

  44. SUBMITTING A BID • Bids are submitted online only • Up to 3% of Purchase Price can be applied to closing costs, entered as a numeric figure • Up to 3% of Purchase Price can be applied to agent commission

  45. AVOID COMMON ERRORS!

  46. BID RESULTS

  47. ACCEPTED OFFER

  48. SUBMITTING THE CONTRACT • Package must be received WITHIN 2 DAYS! • Servicer will sign contract and send it via email to you and closing attorney • Acceptance Date = Date you received confirmed contract

  49. CORRECTIONS TO CONTRACT • If you need to change items, contact the Servicer • Must be corrected and returned within 2 BUSINESS DAYS • If there are still errors, contract will be canceled or awarded to next highest bidder

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