| Home» Foreclosure|
|FHA Foreclosure may refer to the process of foreclosing a property insured by the Federal Housing Administration. It may also refer to the various solutions being made available by this federal institution for foreclosure prevention. The term may also refer to the seasoning rules and waiting period requirements for obtaining a new FHA loan after having gone through a foreclosure procedure. And finally, the properties foreclosed by FHA and then made available as HUD homes for sale are also implied with the search term FHA foreclosure.
One should explore the resources made available online by the US Department of Housing and Urban Development to know more about any aspect of FHA foreclosure. There exist guidelines that comprehensively cover all aspects of the topic according to the applicable laws of the each US state. Moreover, one can contact lenders, real estate agents and similar other professionals to get updated news, statistics and much more information pertaining to a local area.
FHA Foreclosure Guidelines
FHA guidelines for those who previously own a home that was foreclosed due to non-payment of loan do not allow them to qualify for an FHA-insured mortgage again until a seasoning period of three years elapses. Under a similar situation, the bankruptcy seasoning may not be more than two years.
A lender, however, can make exceptions to these waiting period rules provided there are documented proofs that establish the reasons of foreclosure beyond the control of the borrower. The lender should also see that the borrower has rebuilt good credit since losing the first home.
FHA Foreclosure Process
When you miss two payments in a row, the lender gets the right to foreclose on your property. However, with the Federal Housing Administration being a party to the contract, the lender must file form 2068 Notice of Default describing the reasons for the delinquency.
An FHA loan counselor may be designated to look into the issue and try to work out a forbearance agreement with the lender allowing you to make back payments in a way that is convenient to you. This agreement will delay the foreclosure proceedings by one year. During the period, you have enough time to resolve the issue either by exploring options that your lender might offer or through some other sources of fund.
If the issue is not resolved within the forbearance period, the lender will start the proceedings by filing a default status report. The rest of the process will be the same as the usual foreclosure and the timeline will also remain the same.
FHA may once again come to your assistance by allowing a short sale process if the current value of the property is not enough to pay the total outstanding debt of the lender. Deficiency judgment after a short sale process is subject to the state laws. Under disaster relief options, you may qualify for a foreclosure moratorium of 90 days, subject to your compliance with the guidelines in this regard.
FHA Foreclosed Homes for Sale
In most cases, FHA ends up owning the home foreclosed by a lender on the mortgage it has insured. These properties become HUD-owned properties and are made available for sale through online listings and local real estate agents. The list of FHA foreclosed homes for sale is available on HUD Home Store, a website owned and maintained by the US Department of Housing and Urban Development. For help on how to register and search residential properties, you can use the resources provided there.