Padding The HUD Is Important In Short Sale Dealings
For those of you that haven’t seen Group 46:10 or shortsalepowerhour.com in the past, Kevin and Fred are rather informal. So, if you don’t care for their dress or demeanor, we hope that you at least collect some good information from their content.
Today Kevin and Fred would like to chat about a method called padding the HUD and the entire title portion of the short sale transaction. Particularly, we’ll give you some details about padding the HUD with the next couple episodes that ensue relating to other detailed tactics with your title officer.
Recognize, when we use the term ‘padding’ we are referring to the estimation of the fees that you put on your original HUD. The grounds for doing this is that banks like to strip away and negotiate fees even when they don’t need to.
When you pad a HUD you are building a win for the bank since they get to eliminate some fees and they feel better about the deal. A lender may inform you that they don’t strip fees away, but try sending in a HUD with the minimum fees on it and see if the bank tries to strip some of those fees away. You will quickly learn your lesson.
In fact, you may not be able to send an accurate HUD because of the flexible closing date. Numerous things are projected like home owners association fees, taxes, and other little fees. Frankly, if there weren’t any counteroffers this possibly wouldn’t be needed. There were many occasions in the beginning of this business where Kevin and Fred didn’t pad the HUD and ended up taking a hit on their commission.
The last thing that you have to remember is that padding is not illegal or immoral. Much like a home buyer that can afford $200,000, but makes an offer at $190,000, they are basically protecting their interests.
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