Anybody having challenges with FHA loans on Foreclosure property?

Asked by , Thu Oct 14, 2010

Lets hear the issues so others don't get caught in same trap--

Help the community by answering this question:

+ web reference
Web reference:

Answers

9
Lynn Murphy…, Agent, Mason, OH
Sat Apr 9, 2011
Trent, as a REO listing agent, I keep getting curve balls thrown at me. The latest is one of the "big banks" I list for, is now requiring that the property be de-winterized for only 4 days for the inspection and appraisal. As you know, the FHA appraisers are not that easy to schedule. I'm thinking of asking for at least 2 weeks for the inspection period. When I hear from the appraiser, we could schedule the inspection. If the buyer wants to move forward after the inspection, we move forward with the appraisal, and then re-winterize. It's easy enough for the "big banks" to implement these requirements. The logistics of getting it done on the ground is a nightmare! In the warm months when I don't have to deal with winterization, I deal with mold and fleas. http://www.LMDhometeam.com
0 votes
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Thu Mar 31, 2011
Hi, Trent. If the LO knows what he/she is doing, outside of the usual issues involving home's value, condition,and or title work, there should be no unusual problems associated with going FHA.

And in response to Don's comment/question, it sounds as if its a redemption period issue he's bringing up and been having. Some bank don't have a problem financing a purchase during that period. Others' do.
0 votes
, ,
Thu Mar 31, 2011
Thanks for all the great answers! This got some good viewing!
0 votes
Carl Henker, , 95928
Thu Oct 14, 2010
Health and safety issues are the main concern. Have a look at the property before the appraiser goes out and try to get the exposed wires missing fixture taken care off before hand. Makes for less funding conditions and re-inspection's by the appraiser. Most properties have pictures and/or virtual tours you can look at.
0 votes
Don Brenneman, Agent, Centerville, OH
Thu Oct 14, 2010
Yes, as a Real Estate Agent and a real estate investor I am finding the answer to the FHA requirements on foreclosed properties vary by the person you talk with. One of the biggest questions is how long does it take to get the home closed once the property is purchased at the Sheriff sale. There is a question about whether the 90 day wait period is still in effect. The best I can tell is that it depends on 2 items. One is if the new home price of the subsequent purchaser exceeds 20% of the sheriff sale price then the home may have to wait 90 days to close again. Also, I have heard that it depends on the lender and some may be able to still close the property sooner. It is hit or miss with this so check out a few lenders to find out what they are telling you in regards to the timing.
0 votes
Lenderbradfo…, , Cleveland, OH
Thu Oct 14, 2010
As a fellow Lender, one issue are the utilities to the foreclosed properties. Buyers looking for FHA, VA or Conventional Loans need those utilties on at the time of the appraisal. I have seen some preservation companies not just turning off the water or removing the meter. The will cut the pipes at the meter that way it can not be easily reconnected. Other than that issue, Foreclosures tend to be distressed properties that need work. My best suggestion to buyers of these homes is to consider FHA 203K Loans that allow buyers to purchase the home and also make repairs or improvements to the homes.
Web Reference:  http://www.Ohio203k.com
0 votes
James Deskins, Agent, Worthington, OH
Thu Oct 14, 2010
Condition of property, mostly.
0 votes
Roswell Moore…, Mortgage Broker Or Lender, Scottsdale, AZ
Thu Oct 14, 2010
I am not seeing any additional challenges with FHA financing on foreclosures. Do you have specific items you are running into?

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund our own loans, on time.
NMLS ID 263779 | AZ BK 0903725
Web Reference:  http://www.ezAZloan.com
0 votes
James Deskins, Agent, Worthington, OH
Thu Oct 14, 2010
That's always a challenge for anybody who's done this for a while...
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more