We hear a lot about buying a HUD home. I thought I would throw together a basic primer for those of you who are interested in getting in on the action. If you have any questions about anything below please let me know.
What Is a HUD Home?
HUD Homes comprise one of the largest inventories of foreclosed properties in the United States. They are owned by the United States Dept. of Housing and Urban Development (HUD) . A HUD Home is a property that has been lost by a previous owner in foreclosure to a bank or other lender, or a property that an owner has given back to the lender with a deed in lieu of foreclosure. Property owners facing financial difficulties are sometimes unable to keep up with mortgage payments. In the case of HUD Homes, the property owner is a person who obtained an FHA mortgage to purchase or refinance the property as a principal residence.
There are currently over 500 properties in the Lehigh Valley that are either bank owned or classified as a “short sale” where the owners owe more than what the properties are worth. The banked owned number 162. Some of those are actual HUD floreclosed properties. They are the real bargains that everyone keeps asking me about.
A lending institution, such as a mortgage company, bank, or savings and loan association, funds the mortgage loan; the Federal Housing Administration ( FHA ), an agency that is part of the U.S. Dept. of Housing and Urban Development (HUD), insures the mortgage. The mortgage insurance protects the lender from financial loss in the event the borrower defaults. When an FHA homeowner defaults on an FHA loan and the bank takes the house back in foreclosure, the lender has two choices about the disposition of the property:
There are several other ways HUD takes ownership of properties:
Tune in later in the week for part 2, ” Do I qualify for a HUD Home?” In the meantime if you would like a list of HUD Homes, call me or email me from the contact information on the right.
Tags: Allentown, bank owned, Bethlehem, buy, Easton, foreclosure, homestore, HUD Homes, information, Lehigh Valley, Nazareth, Pa, reo, sell