What is HUD Guidelines 24 CFR 206.125?

[Kerry M.]

There is a 3/1 home for sale for a few thousand dollars in my target area. Does this mean I have to pay 95% of the original mortgage held by the lender after the purchase? The home is listed in foreclosure and was recently occupied.
Thanks!

[Kyle J.]

Here's some info that may help answer your question:

http://www.law.cornell.edu/cfr/text/24/206.125

and

http://www.myreoagents.com/default.asp.pg-Fannie-Mae-HECM-Offer-Guidelines

[Kerry M.]

Kyle J. Thank you. So does the article mean that there is more payment due after the sale? (The home is foreclosed on from a reverse mortgage.) Any reply appreciated.

Kerry

[Kyle J.]

Originally posted by Kerry M.:
Kyle J. Thank you. So does the article mean that there is more payment due after the sale? (The home is foreclosed on from a reverse mortgage.) Any reply appreciated.

Kerry

I'm not an expert on the matter (maybe someone who is will chime in with more info), but what payment after the sale would you be referring to? It's my understanding that the mortgage would be satisfied upon the sale of the property.

Here's the actual text of the HUD guideline if you're interested or it help clear up any remaining questions:

http://www.gpo.gov/fdsys/pkg/CFR-2011-title24-vol2/pdf/CFR-2011-title24-vol2-sec206-125.pdf

[Kerry M.]

Thank you.

[Kevin Johnson]

Hi Kerry, were you able to purchase this property? If so what was the time frame from offer to close and what if any potential roadblocks did you run into?

I am looking into a similar property that was foreclosed on under this CFR.

thanks

Kevin

[Kerry M.]

Kevin,

I wish you success. No, I didn't purchase and so don't have help in this area.

Kerry

[Blake C.]

I found this older thread and I was wondering if anyone has a solid answer to these. There are two properties in my area listed like this right now.

[Wayne Brooks]

On reverse mortgages insured by FHA, which is the overwhelming majority, a lender must sell the property for at least 95% of the FHA appraisal in order to be reimbursed in full under their insurance from FHA. These sales, which are short sales, are final...no assumptions of additional debt by the purchaser.

[Mark Beekman]

I'm resurrecting this thread for some clarification.

I'm looking at a property subject to these guidelines and I'm told that a Corporate addenda will apply once offer is accepted.

What exactly does this all mean? Just that they won't go below appraisal price?

[Chris Masons]

I am actually going to see one of these properties hopefully tomorrow here in NJ.

From what I have gathered  Bnak has taken property back due to original mortgagee having a reverse mortgage and passing away.

The debt must be paid back to bank that lended the funds. And from what I am reading the price listed is final. no negociations at all.....

regards,

Chris

[Helder Cristovao]

Hi Chris,

A fellow Union Farmer!

I'm looking at one of these properties right now as well, in Middlesex County. Did you get anywhere with the one you looked at? Any additional information on if they take offers below listing price?

Thanks,

Helder

[Wayne Brooks]

Depends on whether the listing price is the required price (95% of the FHA appraisal) or whether they put some wiggle room in it.

[Rylan Spear]

Any updates here? Has anybody successfully purchased a HUD property with HUD Guidelines 24 CFR 206.125???? I'm currently trying to figure out a purchase on a property like this.

[Sean Cole]

I have.  Generally, the only price that the seller can/will accept is list price.  I've paid less, but it's always been due to lucky timing where a price reduction was about to be posted or the agent processed a price reduction to meet my price.

In terms of the closing process, it's just like any other purchase.

[Irina Finkler]

Originally posted by @Sean Cole:

I have.  Generally, the only price that the seller can/will accept is list price.  I've paid less, but it's always been due to lucky timing where a price reduction was about to be posted or the agent processed a price reduction to meet my price.

In terms of the closing process, it's just like any other purchase.

This is a great thread. Thanks to everyone who answered here.

I have a question though. I understand the offer amount on a property under this guideline has to be 95% of asking price or higher.

But what about concessions? Can we ask for any amount of cash at closing for repairs?

[Rich Hupper]

Can someone tell me if this rule stays with a property forever or if the property never sells the ruling can expire?

[Wayne Brooks]

It applies for at least six months after being offered for sale as a REO.