You cant do an FHA loan if....

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evperry

94 Posts

Posted - 06/06/2008 : 7:09:29 PM

you are selling the house as a real estate broker.

but does anyone know of any restrictions on doing an FHA loan, if you happen to own the property?

Mandyvilla

3453 Posts

Posted - 06/06/2008 : 7:22:17 PM

Legally, you may be able to. Ethically, it's a huge conflict of interest.

3019 Posts

Posted - 06/06/2008 : 7:23:30 PM

ANY party related to the transaction; ie. Realtor, Broker, Appraiser, Atty, etc.

Mandyvilla

3453 Posts

Posted - 06/06/2008 : 8:08:57 PM

I don't know if that is accurate about "any party" and I don't know if you are stating illegal or unethical. How many agents do we see being their own agent and a party to the transaction, some even handle the buy side on their own sales. Or, how many deals have you had where the realtor wanted to put their commission as the means for down payment and closing on a home they are personally buying?

Interesting question. I once had a personal sale fall through, actually the lender wouldn't honor the lock. The market had moved and I talked to the boss - we took it in as a VA assignment, just so we could close. I honestly don't know if I would have taken the original loan application if I had the opportunity.....that was in another recession we weren't having.

3019 Posts

Posted - 06/06/2008 : 8:19:58 PM

quote:
Originally posted by Mandyvilla

I don't know if that is accurate about "any party" and I don't know if you are stating illegal or unethical. How many agents do we see being their own agent and a party to the transaction, some even handle the buy side on their own sales. Or, how many deals have you had where the realtor wanted to put their commission as the means for down payment and closing on a home they are personally buying?

Interesting question. I once had a personal sale fall through, actually the lender wouldn't honor the lock. The market had moved and I talked to the boss - we took it in as a VA assignment, just so we could close. I honestly don't know if I would have taken the original loan application if I had the opportunity.....that was in another recession we weren't having.

You can be a counter-party to the sale, but you can't write the FHA loan as an interested party. You can use the RE commish as a DP, but it must be considered a seller concession on the GFE (makes the HUD-1 a nightmare) if you go FHA, which you (RE agent) cannot write.

evperry

94 Posts

Posted - 06/08/2008 : 06:13:23 AM

I read on this site that the realtors office and brokers office cannot cooperate.

Disclosures should eliminate any legal issue but im wondering if its OK to own the property as long as you are not the broker on the deal.

mganovsky

2074 Posts

Posted - 06/08/2008 : 5:07:41 PM

If you are a Realtor you can not originate an FHA loan.

CoolMtgGuy

3720 Posts

Posted - 06/08/2008 : 6:49:13 PM

There are those to whom the rule does not matter. I met a real estate agent who told me that he was also originating FHA loans. When I told him that it is not allowed by HUD, his response was "show me". I printed the HUD rules and showed it to him. He crumpled it, threw it in the garbage and said "well my broker said it is ok". Preaching to the non-believer is challenging.

quote:
Originally posted by mganovsky

If you are a Realtor you can not originate an FHA loan.

evperry

94 Posts

Posted - 06/08/2008 : 7:19:13 PM

I spoke to an experienced guy 2 days agao and what he said made sense. It doesnt matter until the loan goes bad.

quote:
Originally posted by CoolMtgGuy

There are those to whom the rule does not matter. I met a real estate agent who told me that he was also originating FHA loans. When I told him that it is not allowed by HUD, his response was "show me". I printed the HUD rules and showed it to him. He crumpled it, threw it in the garbage and said "well my broker said it is ok". Preaching to the non-believer is challenging.

quote:
Originally posted by mganovsky

If you are a Realtor you can not originate an FHA loan.