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FHA Short Sale Process

21 Jan

The official name for FHA Short Sales is Pre-Foreclosure Sale. There are 2 parts to the process for FHA Pre-Foreclosure Sales administered by HUD. The first part of the process is qualifying the borrower (homeowner) for the Pre-Foreclosure program, and establishing a pre-approved list price for the property. Once approved, HUD will issue an ATP (Approval to Participate in the Pre-Foreclosure Short Sale Program). Once that step is accomplished the property can be listed with a Short Sale Specialist Realtor at the approved price. The borrower can receive up to $1,000 in relocation assistance at time of closing.

If the property is already on the market, the price must be adjusted to the approved price and if there is an offer on the property it can be submitted at that time for approval. If there is no offer at the time the ATP is issued, the borrower has 120 days to obtain an offer without threat of the property going to Foreclosure Auction.

Below is a list of required documents for each stage of the process

*Required Initiation Documents:

  •                 Occupancy Letter
  •                 Authorization Form
  •                 Authorization/Acknowledgement
  •                 Financial Worksheet: Hardship letter (signed and dated)
  •                 Verification of Information and Occupancy
  •                 Current, non-expired Listing Agreement (signed and dated by seller and  agent)
  •                 Current, non-expired copy of MLS listing or proof of consistent marketing
  •                 Pay stubs (30 days consecutive; dates, amounts, names, institutions)
  •                 Bank statements (all pages, accounts and borrowers)

NOTE: (Submit as one package; all signatures must be “wet ink”; do not leave any fields blank, use “n/a” if necessary)

*Required Prequalification Documents:

  •                 Signed ATP (Approval to Participate)
  •                 Purchase Contract
  •                 HUD-1
  •                 Listing Agreement
  •                 Current MLS
  •                 Buyer’s Acknowledgement and Disclosure
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Posted by on January 21, 2013 in Helpful hints, Short Sales

 

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