Alabama FHA Foreclosure and Redemption

[Rose Fleming]

I know someone who recently lost their home in a FHA/HUD foreclosure. I think I could acquire their rights of redemption and make a modest profit. I've read the rules about adding taxes, insurance, improvements, and interest. Since its a HUD foreclosure, I don't think there would be any improvements to worry about and the foreclosure auction sales price seems like an accurate estimate of the loan balance based on what I have heard. But should I expect there to also be a lot of pre-foreclosure fees and expenses required in a redemption?

The second half of the question is if the home is sold as a HUD REO and HUD nets more than the original loan balance, would this person receive a refund? (Not talking about auction price here, talking about the actual HUD sale) I wouldn't want him to later feel like I screwed him.