Jul 02 2010
Padding The HUD Is Critical In Short Sale Transactions
For those of you that have not seen Group 46:10 or shortsalepowerhour.com already, Kevin and Fred are rather casual. So, if you do not care for their dress or attitude, we hope that you at least gather some high-quality details from their content.
Today Kevin and Fred would like to talk about a tactic called padding the HUD and the entire title portion of the short sale transaction. Specifically, we’ll give you several details about padding the HUD with the next couple episodes that follow relating to other detailed tactics with your title officer.
Understand, when we use the word ‘padding’ we are referring to the estimation of the fees that you put on your original HUD. The basis for doing this is that lenders like to strip away and negotiate fees even when they don’t have to.
When you pad a HUD you are building a win for the bank because they get to eliminate some fees and they feel better about the transaction. A lender may inform you that they don’t strip fees away, but try sending in a HUD with the smallest possible fees on it and see if the lender tries to strip some of those fees away. You will quickly learn your lesson.
To tell the truth, you may not be able to send an accurate HUD because of the variable closing date. Many things are estimated like home owners association fees, taxes, and other small fees. Truthfully, if there weren’t any counteroffers this probably wouldn’t be needed. There were numerous occasions in the beginning of this business where Kevin and Fred did not pad the HUD and ended up taking a hit on their commission.
The final thing that you have to take into account is that padding is not illegal or immoral. Much like a home buyer that can offer $200,000, but makes an offer at $190,000, they are only protecting their interests.
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