One government agency that has been involved in the housing market since the ‘60’s and continues to be at the forefront, even with short sales, is HUD (the U.S. Department of Housing and Urban Development). One of the most active organizations within HUD is the FHA (Federal Housing Administration), which plays an active role in backing many home mortgages.Much of the FHA’s focus has been around first-time buyers, who do not have a lot of money to put down and may have average credit scores. Unfortunately, many of those same buyers are now struggling with their home and looking for options.
If your mortgage is an FHA backed loan, then you should be aware of how they treat short sales, FHA refers to them as pre-foreclosure sales.
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This is by far the most transparent and well explained short sale program of all the government run companies (i.e., Fannie Mae & Freddie Mac). It provides the most crystal clear guidelines of any other short sale program out there.
Benefits and Requirements of the FHA Pre-Foreclosure Program:
- Up to $1,000 in borrower relocation assistance at closing
- Full debt forgiveness
- No promissory notes
- No cash contributions
- Up to $2,500 for 2nd mortgages
- Submittal of a short sale package and PFS (Pre-Foreclosure Sale, another name for a short sale) form prior to having an offer to get the process started. This can provide a good head start in the process.
- Foreclosure will be delayed for the duration of the approved PFS period
We conducted our first HUD short sale in 2007, and in 2011 alone we completed over 100 HUD Pre-foreclosure sales.
Keep in mind, your mortgage may be serviced by a major bank like Bank of America or Wells Fargo but backed by FHA which would qualify you for this program.
In fact, we have conducted HUD short sales with every major servicer there is such as, Bank of America, Citi, Chase, GMAC, Wells Fargo, Ocwen, and with multiple smaller servicers like American Home Mortgage, Flagstar, and Midland Mortgage.
After 6 months listed with another realty company and 0 offers and after studying their website, I decided to make the change to McGeough & Lamacchia. One of many on the verge of foreclosure after job loss I needed better results in a very short time frame. I found that with McGeough & Lamacchia. The short sale team of Anthony and Angela are nothing short of genius. Within 2 weeks of listing my home we had an offer and the short sale process was underway. I wish I had gone with them from the start!- Paula P., Brockton, Massachusetts