FHA arms-length guidelines

[Mark Elegeert]

Hello all,

I know there have been some changes to FHA short sale guidelines lately but I was under the impression that they were rescinded. Nationwide Advantage Mortgage just told me that I couldn't negotiate an FHA short sale if I am the buyer. I can still go through the realtor that the property is listed under, but I was hoping someone could shed some light on the guidelines.

Currently, is it really not legal for the buyer to negotiate an FHA short sale?

Thank you,

Mark

[Mark Elegeert]

I called HUD and got the info. As per Mortgagee Letter 2008-43 an arms-length transaction in my situation is allowed. I can, as the buyer, submit and negotiate the FHA short sale directly with the seller's lender.

Now the problem will be getting the seller's lender to understand this!

The Mortgagee Letter can be found here:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee/2008ml