Comments on: HUD foreclosure sale prices drop, but Realtors don't buy it

By: Chris in Denver

Chris in Denver — Wed, 23 Dec 2009 21:48:18 +0000

Jay, It's good to know there is some enforcement out there. Thanks for the info. Chris

By: JJ in Denver

JJ in Denver — Wed, 23 Dec 2009 02:31:35 +0000

I have to agree with Chris in Denver….Although I have had two HUD offers accepted, this is far from a 'normal' transaction. With water liens, HOA liens and attorney's fees still in force, the purchaser gets hit with more and more fee's that every agency, group, or firm tries to levy. I guess it depends on which side of the transaction you're on. On my last offer, appliances were stolen from the home between contract and closing and MCB offered $200 for a $1,500 S/S oven…..then left the adjustment off the HUD-1! The more I look at the way HUD prices its homes, the more I question their appraisers (I am an appraiser as well). Add to the low initial offered prices with the artificial demand generated by the governments stimulus plan and this tells me we are in for a hard fall after the final offers are closed around 30 June 2010. I noticed there was another 996 homes with NEDs filed in six counties just last week. Any market recovery is still very far away……………

By: Jay

Jay — Wed, 23 Dec 2009 00:24:28 +0000

What is the purpose of the FHA, what is the purpose of the HUD home program? In Colorado, they are far away from their mission, as they arent allowing FHA HUD buyers to even have a chance at home ownership. But in other states they allow it. Can anyone tell me why?

By: Jay

Jay — Wed, 23 Dec 2009 00:24:14 +0000

I have FHA buyers too, and as sad as it is, the real problem is that HUD doesnt treat FHA buyers fairly in Colorado.
Other states allow FHA buyers to get their HUD properties new appraisals, but not in Colorado. As a Federal organization, shouldnt an FHA HUD home buyer in Michigan, Ohio, Arizona, (etc) be treated exactly the same as an FHA HUD home buyer in Colorado? Why do buyers get special privledges in other states from this federally run organization that they dont get here. Why are residents of other states given special treatment? Those are the real questions that need to be raised!
Since HUD and MCBREO insist on appraising and pricing HUD properties in Colorado WAY WAY below market, as evidenced by 30+ overbids on almost every property, the fair way to let FHA buyers compete against VA buyers and CONV buyers (and cash buyers) in Colorado is to allow Colorado FHA HUD buyers to get re-appraisals after the bidding is completed.

By: Jay

Jay — Wed, 23 Dec 2009 00:23:42 +0000

Chris, you are correct that any FHA buyer in Colorado that bids over HUD's as-is appraised value (usually same as initial asking price) has to bring the difference to closing in cash. But these over-bidders are not investors, they are VA buyers and CONV buyers that do not have to use the FHA appraisal. I have sold dozens of HUD homes this year to VA and CONV Owner Occupant buyers in the initial O/O period, even my buyers were bidding 10k-20k over the asking prices and getting outbid by another 15k on top of that, it truly was a frenzy before the $8,000 tax credit got extended. One VA buyer put in 16 bids this summer, every bid way over the asking price before he finally won one.

The problem isnt investors buying in the O/O period, that really isnt happening here. The local HUD office used to have 5 enforcement agents in 2005, now they have over 20 here in the Denver area.

By: Chris in Denver

Chris in Denver — Tue, 22 Dec 2009 22:33:08 +0000

My experience with HUD properties in the Denver market has left me very jaded to say the least. I have yet to have one offer accepted, out of the 30 or so I have submitted for clients over the past couple of years. It seems to me that investors are being allowed to jump the gun and bid during the initial 10 day owner occupant period, with little or no consequence. The prices get driven up by these generally "all cash buyers" and an owner occupant simply can't compete. If my buyer has an FHA loan, any amount bid over the asking price has to be brought to the table in cash, since the HUD asking price is the FHA appraisal number. It just stinks that the people who really need and deserve these types of properties get left out so investors can snatch them up and make a buck. While I realize that an investor caught misrepresenting their status can be fined, it's not very likely to happen. Why would HUD complain when the homes are selling for more than they list them for? Like I said, I'm jaded to say the least.

By: Nashville Grant

Nashville Grant — Sat, 19 Dec 2009 15:39:48 +0000

We are seeing the same interesting pattern in our market. It almost seems strange to think that buyers would rather jump through all of the hoops that a short sale presents rather than the clean transaction of a HUD home. The only explanation I have is that most of the HUD homes in our area are in very bad condition comparatively.

By: FHA foreclosures fall | InsideRealEstateNews.com

FHA foreclosures fall | InsideRealEstateNews.com — Fri, 18 Dec 2009 21:15:36 +0000

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