Hello Fellow Realtors,
This is a HUGE set back and I am interested to see how PEMCO is going to reward bids on HUD houses with this news.
Mortgage E letter March 8, 2010
You can no longer order a 2nd Appraisal on a FHA HUD REO if the appraisal is still valid (180 days) UNTIL APRIL 1ST 2010 AND THEN DROPS TO 120 DAYS
THIS IS EFFECTIVE IMMEDIATELY BY HUD
If You have a FHA loan on a HUD home currently in the pipeline the PEMCO Appraisal will be the appraisal used for Value. If it is still valid as per above rule changes.
What does this mean to you ?
Well in a nutshell: If your buyer bids more than the appraised value posted on the HUD listing, then they will have to pay the difference between the appraised value and the sales price unless the appraisal is 4 months or older.
Example - Sales Price $100,000 Appraised PEMCO value $95,000 Max loan amount on a $100 HUD with FHA financing $94,900
Your buyer would have to bring $5100 to get their deal closed.
The problem here is that as PEMCO does not release the full appraisal until AFTER the bid has been awarded, there is no way to know if there is an option to get a second appraisal ( in the case you get lucky and it is out of date) or not.
I hope this helps you and your buyers.
Remember call or email me for loan scenarios and pre-approvals.
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