Question: In a short sale where the financing was insured
by the FHA is the borrower first required to miss three payments? This was the
advice given by a lender before it would allow a short sale to go forward.
Answer: We sent this question over to HUD and received
this response:


“The information is incorrect,” HUD told OurBroker.com. “Under the code of
federal regulations 24 CFR 203.370 (c) 2 and section 204 of the National Housing
Act the loan must be in default at the time the short sale transaction closes
for HUD to legally pay a claim (31+ days). This does not preclude the servicer
from processing the short sale request with the loan current if the borrower and
property meet all the short sale requirements and close the transaction with the
loan one month delinquent.”