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FHA Litigation Assignments

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Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Is anyone still doing any FHA litigation work? Last year I was doing about 2 a month, but just noticed in my records that I've done zero this year? Maybe there was a change within HUD?
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
What is a FHA ligitation appraisal?

Thanks in advance.ed
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
My ears are perking up Bucks. :question: I used to do reviews for the REAC, but never heard of FHA ligitation appraisals. Yeah I know they didn't pay much, but I liked doing them and made for good infill work with no pressure for values.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
I'm sorry Edward, mitigation. loss mitigation to be specific. These assignments were strange birds................. a blend of REO/short sale/FHA/relo. Every
assignment I ever received was for loss mitigation on active listings which had FHA loans in
delinquency. It appeared the noteholder was always about to pull the plug, but wanted to see if
there was realistically a hope for the sale. They were adamant about getting info on any deferred maintenance
that would affect marketability. They were actually easy assignments and no problem getting an
appointment since they were active listings and had an anxious seller/borrower and absolutely no
value pressure. They required you to be on the FHA roster, but they didn’t care squat about the
VC sheets. Maybe they’ve stopped ordering them.
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Had my first one this month. Interesting, yea. I'd call it that. Hubby and I caught both the drug deals taking place WHILE WE WERE INSPECTING! Can you believe that??? As we were arriving, two large, dumpy females were leaving with thier purchase. While we were inspecting the interior, his main line guy dropped off the next supply. :blink:

Whole interior was plastered with ****o photos torn out of magazines and pictures of pot plants. Interesting interior shots.....
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
:rofl:

Cat:
You didn't take pictures of the PEOPLE did you????

Semi-seriously: BE CAREFUL girl! Glad you had your hubby with you :( .

Bobby, I am going to make some inquiry into this! Sounds good to me other than the fact one would as Cat expereinced actually have to tread the floors which are disgusting enough AFTER the loser occupants vacate with most of their possessions... not sure I want to see how they live while still thier :unsure: .

come to think of it maybe I'll passs...

eeeeyeeewww ;)
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Lee Ann,

LOL! No, Girl, no pics of the folks, or their activities. Actually, the living room was clear of most illegal/smut decor. Those items are not VC's........yet. :D But this does teach us one important lesson- small time drug dealing is obviously not where the money is at. :ph34r: This was not the Taj Mahal, it was a newish doublewide on a cheaper city lot. FHA loan, payment couldn't be more than $500-600. The place was in fairly good repair, and the 'business man' was quite amiable, just well, heebie jeebie material.

The good news is, there were no children involved for a change. Those are the ones that bug me the most, and since this is my first loss mitigation, I've only been to the properties after they've vacated. It does bother me to see the holes in the walls/doors and evidence of little folk living with the violent deadbeats.

As a female appraiser, I probably would opt for the 'buddy system' on these as a rule.

I am curious Bobby, how do these 'Fire sale prior to foreclosure' situations come about? Does the homeowner opt to list it on his own and work with the lender, or does the lender pick a Realtor and start the process? If the situation is the first scenario, I'd be willing to bet the reason you've not seen any is just pure apathy. Most of the HUD REO's I'm doing, the prior occupants were not motivated enough to wipe the spills (or Fido accidents) off their previously brand spanking new carpet, let alone try and sell and save their credit.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Would you look at this. Lee Ann and Caterina hijack my post, start chatting about drugs and girly pics (or
boys?)and then insert a question out of guilt. ;) Clever! Caterina your assignment sounded more
like a short sale. From what I observed on all mine, the borrowers choose their own RE agent....I
think you’re right though, in every instance the borrower/sellers were motivated although I wouldn’t call
them fire sales......the lender wanted to minimize the loss they were looking at. Out of curiosity I
pulled data on several and 2/3s of them sold close to their list price and my value.....they were
reasonably priced since they weren't sky high refis. The other 1/3 went down the foreclosure path.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
I's soo ashamed.

So to bring it back on topic:

These are NOT then 'cash for keys' or actual forclosure sales but sort of intermediatary 'work-out' bufferes to give the defaulting owners a chance to get themselves AND the lender out with no stigma, or lender funded markteing 'issues'?

Hmmm seems like a good plan!

And you do a full appriasal on the place?

2/3rds isn't a bad success rate, given the alternative!
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Bobby,

:redface: Hijack? Well, OK. I went off of the 'interesting' point. Whoops! LOL.


After reading the small print on the order from this one, I'd be willing to bet the asset management company picked the Realtor. One of those 'if the listing agent produces a sale, the listing agent agrees to pay ABC Asset Management a 30% referral fee.' I still have Realtor blood in me, and those programs still chap that side of me. But again.....not the point. My gut tells me this homeowner was told to list, as he wasn't all that motivated to make the place available.

This particular home is in an area of about 60% REO activity as a portion of the market. The Realtor has is listed for what likely is a short sale, yet my comps (doublewide to boot....looooow values and only REO comps) indicated that list price was still 23% above market.

This type of program has hope in times when the REO properties aren't such a huge sector of the market. Unfortunately for this case, the DW factor pretty much sealed his fate. There just aren't but a handful of owner/occupant transactions taking place with all the low priced REO competition. If your area is experiencing anything similar, perhaps that's why you're seeing fewer???

After seeing the 'interesting' side of this one, I'm leaning towards preferring the REO assignment myself. However, if you're interested in more, I'd market to these asset management folks.
 
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