December 17, 2017

HUD Foreclosure Problems

“Housing and Urban Development or HUD has come under fire recently due to their delay in funds for the sale of several hundred foreclosed homes. The Wall Street Journal reports that HUD lacks the funds to pay for closing costs which means that they cannot pay for lawyers and the other necessary closing agents needed to conclude transactions. The reason for this crisis is blamed on the unusually high demand for foreclosures and many organizations, such as the National Association of Realtors, have blasted HUD for their poor handling of the situation.


HUD Foreclosure Problems

“”If banks would return to normal underwriting standards we’d get a much faster recovery in the housing sector,”" National Association of Realtors chief economist Lawrence Yun said in an interview with CNBC. This position is not a new one for the organization. Many within it have the feeling the HUD has created an unnecessary situation that has hindered the sale of properties that buyers are willing to pay the full listing price.

Not only is there a concern about efficiency in the closure process but analysts are concerned about the recent over eight percent monthly jump in contracts for current home purchases in the very unstable housing markets. Experts have questioned the legitimacy of the number due to the fact that the majority of the contracts were on short sales. Sales in which the bank agrees to let the house sell for less than the cost of the mortgage. In most cases these sales go to pending even though they may not be sold, mostly because of fraud and will do nothing but exacerbate the already volatile market in the long run.

A spokesperson for HUD dismisses these claims, stating the affected areas were centralized in only six states in the northeast section of the country and occurred because an increased demand caused funds allocated to that region to be depleted. New contracts are being negotiated and once they are executed closing will resume. HUD promised that all closures should get back on track in less than a months time but until then the deadline will be extended for sales if necessary,”

Foreclosures Reportedly Delayed as HUD Lacks Funds to Pay Closing Agents, Attorneys


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