HudSoldHere - Terri Kilpatrick, Treesa Daniels, & Kristine Duncan

Everything You Ever Wanted To Know About The HUD Sales Process

Info on Contract Extensions and Termite Letters

I just wanted to take a minute and touch base about a few changes that have not been publicized, but that we have experienced ourselves regarding contract extensions and termite letters.

For the most part, the contract extension process remains unchanged. Extensions for a purchase price of $25,000 or less are $150.00 ($10.00 per day, issued in 15 day increments), purchase prices of $25,001 - $50,000 are $225.00 ($15.00 per day, issued in 15 day increments), and purchase prices over $50,000 are $375.00 ($25.00 per day, issued in 15 day increments). Extension request forms and funds, which must be a cashier's check or money order are still made payable to and sent to HUD's designated closing agent for the region the property is located in. For Columbus, Georgia and the surrounding areas in Georgia, the designated closing agent is O'Brien Law Firm in LaGrange, Georgia. Lee and Russell Counties in Alabama are serviced by Redmond Law Group. Click here for a link to the list of HUD's designated closing agents for our area.

The major change that we have noticed regarding contract extensions is that now, all contract extension requests MUST be accompanied by funds. Previously, the extension fee was typically waived for the first extension request for owner-occupant purchasers. The fee is still being waived in some cases, in a roundabout way. Although funds must be sent, they are refunded to the purchaser at closing should HUD decide to waive the fee. It has been our experience that even if there is a delay due to title issues at no fault of the purchaser, funds must still be sent along with the extension request and will be reunded at closing.

The change regarding termite letters came as quite a bit of a shock to us, because we were not notified of a procedure change, and our purchaser ended up having to extend because of the confusion. The rule is still that HUD will issue a termite letter for any HUD properties that are being purchased with FHA financing. Previously, it was the responsibility of the selling agent to request the termite letter per the instructions included in the executed contract package. However, when we requested a termite letter last week on behalf of our purchaser, we were told that letters cannot be requested by agents and will not be delivered to agents. It is now the responsibility of the LENDER to request the termite letter. So, Agents and Buyers, please be aware of this change and make sure that your lender requests the termite letter from HUD no later than 7 days prior to closing to prevent any costly delays.

Posted By - Terri Kilpatrick - 01/27/2012

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