If you’re not trying to use a HECM for Purchase to buy the home (and you’re not) and if the existing servicing company is not out of business (which would be the only circumstances in which HUD had either temporarily taken over the servicing or was trying to get it assigned to a new servicer), the sales price would be whatever you can get the seller to accept.

The seller would presumably be the homeowner who took out the reverse mortgage in the first place, or their beneficiary or legal representative if that homeowner has passed away, but not HUD or the loan servicing company.

Oh wouldn’t it be wonderful if there were a distinct weblink for every question.

My question is: Will HUD accept an offer for review of acceptance for a property if the offer is less than 95% of the appraisal if the offer is a CASH OFFER.

Also can you please also include the web link that provides this answer.

Please respond back to hobby0002000@yahoo.com Thanks

The new HVCC rules which go into effect May 1st make it abundantly clear that many of the powers that be not only do not trust appraisers, FHA licensed or not, but that they do not trust loan officers as well.

These strong currents all combine to create the environment in which we, the lenders, and HUD itself have to stumble forward with the HECM For Purchase to comply with HERA 2007.

So, while the program guidelines and its processes have their flaws that we can try to get the powers to address and remedy in the future, we at least have a beginning. That is, if you’re willing to engage and learn in order to help those folks who can benefit from the program ‘as is’. Sometimes, to do what’s best for your client, you have to venture out into terra incognita.

Prepare to have your understanding and knowledge tested, and for your client’s sake, make sure they know that we are ALL beginners in this process and there will be confusion and uncertainty for some time forward.

Either we trust FHA certified appraisers and their appraisals sufficiently to structure loans properly or we don’t. Which is it?

If we do trust them — and we should — then it should not matter whether it is a HECM for purchase or a HECM on a home purchased a couple months ago.

IF the appraisal is accurate then let the risk managers do their job and structure the loan accordingly. But don’t penalize seniors who can negotiate a sales price below appraised value because risk managers were previously asleep on the job.

Seniors could always purchase a home for any amount they could negotiate and then apply for a HECM, the Principal Limit of which has always been calculated based solely upon the appraised value or the lending limit, whichever was lower. But by basing the Principal Limit upon the Sales Price — in the case where the sales price is lower than the FHA appraised value — HUD inadvertently and unwisely reintroduces the necessity of doing two transactions in many cases, a purchase at the best negotiated price and a HECM at the appraised price (enabling the senior to borrow more), thus costing seniors unnecessary time, effort and money for a second closing. This is self-defeating, cost ineffective, and illogical.

And will likely eliminate the possibility of some very sensible and otherwise doable deals simply because some seniors will not qualify first for a regular mortgage to purchase the home in the first place because of too-lowed fixed incomes and/or poor FICO scores.

HUD could eliminate this inefficiency, costliness, and illogical circumstance simply by sticking with its original Mortgagee Letter 2008-33 and the genius contained therein: efficiency, cost effectiveness, and compassion for senior homeowners who are able to purchase a home from a family member, friend, or concessionary seller below appraised value.

I emailed Secretary Donovan today regarding this issue and argued as much. Let’s see his response.