Realtors Slam Lack of HUD Funds in Foreclosure Deals

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Today’s bullish report on pending home sales came with a caveat from the Realtors:

“If banks would simply return to normal, sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector,” said National Association of Realtors chief economist Lawrence Yun.

That part has been their mantra for months. No surprise there. But then:

“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.

This was new to me, so I called over to HUD, and let’s just say they were not exactly thrilled with the Realtors’ statement.

HUD says what the Realtors are talking about only affects sales of HUD-owned foreclosures in six states in the Northeast, and dare I say the Northeast is not where the greatest volume of home sales are taking place right now anyway.

So this from HUD: “Closing on approved purchases of HUD-owned properties has been temporarily delayed in New England. Due to increased demands, funds for closing contracts in this region have been expended and HUD is currently negotiating new contracts. Once they are executed, closings will resume.

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