Real Estate Broker Owner with Rulnick Realty, Inc.


Do you own a HUD-FHA financed home, and need to do a Short Sale? Here is a summary of the requirements do perform an FHA-insured HUD Short Sale or "Pre-Foreclosure" Sale:

  1. You must be delinquent 31 days or more delinquent at the time of sale.
  2. You must list the property with an un-related Licensed Real Estate Broker
  3. You must actively market the property for four months (up to six).

    For the first 30 days of marketing, the short sale lender (mortgagee) may only approve offers that will result in a minimum net sale proceeds of 88% of the "as-is" appraised Fair Market Value (FMV). During the next 30 days of marketing, the lender may only approve offers that will result in minimum net sale proceeds of 86% of the "as-is" appraised FMV. For the rest of the marketing time (60 days), the lender may only approve offers that will result in minimum net sale proceeds of 84% of the "as-is" appraised FMV.

  4. The property must be an owner-occupied, except for cases of job transfer, death, divorce, job loss
  5. There should be written proof of your decrease in income showing inability to pay the mortgage, job loss, etc.
  6. HUD will pay up to 1% of buyer's mortgage as part of closing costs if the new mortgage is also FHA, plus reasonable "seller" costs
  7. HUD allows 6% Realtor commission
  8. HUD will not pay for Home Warranties, points or lender's title insurance
  9. You must get approval to participate in the HUD Pre-Foreclosure Sale Program in advance
  10. Upon acceptance into the program, you will be given Approval To Participate Form which will outline program restrictions

Here are details of the HUD Short Sale (Pre-Foreclosure) Sale Program.  Remember, these guidelines apply to FHA-insured loans only, and there may be some latitude in those requirements.  These guidelines are subject to change.

HUD Frequently Asked Short Sale Questions

For more information contact the HUD National Servicing Center, your lender, and an experienced Short Sale Specialist.

It's Wendy!It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.

Short Sale Pre Foreclosure Help.

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Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.  Call toll-free  1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *HUD SHORT SALE GUIDELINES* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

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Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

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  1. Gene Yakubovich 12/18/2008 08:15 PM
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Comments 32 New Comment

Wendy Rulnick
Destin FL Real Estate
Rulnick Realty, Inc.

Sue - I bet they will not contact you about any deficiency.  What a nightmare.  Who was the lender?

March 24, 2009 09:20 PM
Anonymous #29

Hi Wendy - An attorney negotiated the deal for me...and every thing he suggested to them...the answer was NO.  It was either their way..or the highway !   He asked to waive the deficiency...they said No.  He asked for forgiven debt with a 1099C...they said NO.  They initially wanted me to sign a promissary note at closing....but wouldn't disclose how much...that was really scarry !....and then all we get is a short sale appproval letter I must sign stating they must net a certain amount...closing in 7 days,  I need to pay them $ 4,500 and pay the homeowners fees of $ 3,000 (so I had to use ALL my emergency savings to pay this)  and the balance would be charged off/collectible on my credit report (with no amount listed as to what that balance is.)  The buyer scrambled with his lender to get his financing in 7 days and closed.  I checked my credit report on the 1st of March and under  Rate Status Section it said BAD DEBT, PLACED FOR COLLECTION, SKIP !! (which is obviously a BIG LIE )  and then on Comments on Account Section - it said Charge off Account.  Under High Credit Section it said $ 315,000 ,  under Balance due it says 0 and under Past due section it says 0.

Then I checked my credit report again on March 13th and now under Rate Status Section it says -Payment after charge off/collection.  And on Comments on Account Section - it says "Paid profit and loss."   Under High Credit it now says N/A.....Balance N/A and  Past due it is now 0. 

So -- WE have no idea even what the deficiency would be that is placed for collection.  I actually talked to the negotiator for the lender to verify some information regarding my income (which is barely nothing this past year ) months before we got the approval and he said they take the $ 315,000 balance I owe x 85% = $ 267,750.00 minus the net proceeds of the short sale which came to $ 112,000 to them....he said I owed approximately $ 155,000.    We worked diligently with them on the short sale and abided by their terms....then they slammed my credit report as bad as they possible could and now we don't have a clue as to what their next step will be and how much they claim I  STILL owe ...   Not my fault the property was worth only 1/3 in value of what I paid for only 2 years ago.  The LENDER should be grateful they got anything and did not have to spend the money to foreclose.

March 25, 2009 08:39 AM
Kira Angel
Equity Oregon Real Estate

Thank  you for the guidelines, it is nice to have them alll spelled out like that.  I actually found the HUD short sale I did was easier because they had the guidelines in place.   I am hoping the new HAFA program will make short sales with other servicers easier as well.

December 31, 2009 10:53 AM
Clason Whitney
"Your Proactive, Trusted Real Estate Advisor"
Coldwell Banker Pro West Real Estate

Good comments on here and great explanation from you, this is a good post to learn a thing or two about short sales.

March 04, 2010 05:57 AM
Brady Howard
Managing Broker, Recruiter, Profit share expert
Keller Williams Downtown

Thanks Wendy, these are hard and the more everyone knows the easier they will become.

August 17, 2010 02:05 PM

Wendy Rulnick

Destin FL Real Estate
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Author Bio: Wendy Rulnick, Rulnick Realty, Real Estate Broker in Destin Florida and all surrounding towns

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