HUD1 Form

Foreclosures, Short Sales, Tax Foreclosures
1

In order to complete a Short Sale, Option One Mortgage asked for:

HUD1 Form

Purchase Agreement between homeowner and myself

Preapproval letter (Proof of funds)

  1. With the HUD1 Form what is it that I need to do? I spoke with my lender who is familiar with the form and he advised me that I shouldnt need to submit that untill the bank and I come to an agreement on the price of the home. (Home has 2 loans on it. 80/20.

  2. Purchase agreement - If the homeowners owes $400,000 and I want to offer the bank $300000 what do I write on the purchase agreement for myself and the homeowner to sign. And are there any clauses that I need for the short sale. I am kind of confused, because I dont know if is correct to write a lower price on a purchase contract than what is owed.

Preapproval letter - I got it.

2

Most mortgage companies want to see an estimated HUD-1 form. This is to get in writing who covers closing costs/out of date taxes, etc.

With the purchase agreement, you are pretty much writing up an offer to the bank.

Hope that helps.

3

So it is okay for me to put a purchase price lower than what is owed on the property?

Also is the HUD1 difficult to complete? Instructions anywhere?

4

HUD1’s can be confusing. If you are looking to purchase the house as a short sale, you will need to put the purchase price lower than that owed on the property. You may want to have a realtor show you around the HUD1, not a difficult process, but knowing what goes where can be frustrating.

Deborah Wells gave me the following resources that helped.

The form: http://www.alta.org/consumer/hud_1.pdf
A mini booklet on the form: http://www.hud.gov/offices/hsg/sfh/res/sc3secta.cfm
cliff notes and audio: http://www.alta.org/consumer/hud1.cfm

5

It appears to be very hard to navigate, I am going to see if my loan officer can help me around it. If not I may have to pay a realtor or settlement company to assist me.

6

Bluboxer,
If youare going to use a title company (Which is more likley) then ask them do one for you. Send in the contract to title company and ask them to do pre HUD1. They should not charge you anything as long as you close there if you get this deal. At the same time you can find out more details on property from the title office if you like as well. Realtor and MO continuously get HUD1 help from title officers (They get refferal fees too :-* . If you don’t have realtor and you are doing this oftern you should have good title company and loan officer on your side and they should be willing to act on the moments notice on your request for no charge.

Good luck.
DFW

7

My loan officer just sent me a “Estimate of Good Faith” which shows my loan/intrest rates/monthly payment and I told him that the bank is looking for a HUD-1, he called me back and said that should be suitable.

I dont believe that it will be suitable. I am thinking about getting this: http://www.hud1secrets.com/

Because if I am doing this often then i need to know how to do it.