Profile picture for amandathomas

What is CFR 206.125, and what does it mean for the buyer?







This language is disclosed in foreclosure listings where the home bore a reverse mortgage note that defaulted due to the mortgagor's passing, failure to pay taxes, or both. 

 

HUD regulates the terms under which these properties can be acquired, sold, marketed, & their listing treatment.  If the property is an actively listed REO, a Buyer's Agent can represent a Buyer the same as a traditional foreclosure.  Disclosing the subject conditions communicates that the seller has restrictions under which they are obligated.

 

The HECM Servicing Department of HUD specializes in knowledge about reverse mortgages, &  they are in the best position to address code questions that govern the treatment of these REO assets.







  • March 20 2012 - Plano
  • 7
    7Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (20)

Profile picture for amandathomas


Examples of conditions that properties subject to 24 CFR 206.125 are subject to include:

  1. disclose the condition of 24 CFR 206.125 in the listing
  2. from the date of the foreclosure, the lender must wait 6 months before applying for an FHA claim
  3. Sales price must be ≥ HUD appraised value without special permission from the SVA
  4. Seller repairs are disallowed unless required by local law, or required & approved by the SVA
  5. the transaction must be arm's length
A superior Buyer's Rep will ask the listing agent how the subject property was priced, & to inquire if a HUD appraisal has been completed. It is also beneficial to know the actual date of foreclosure, although the property can still be marketed after a claim has been filed. 



  • March 20 2012
  • 9Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

  • March 20 2012
  • 4Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for amandathomas
@Claudia DeBruyn - thanks for sharing a link to the documentation. Do you have familiarity with the code from a listing or buying perspective? Are you willing to share or fill in any additional information from your knowledge bank? <3
  • March 20 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Jeff Kinkade
I know all the listings we've received from Fannie Mae that were foreclosures on reverse mortgages that had that clause required in it, they do not negotiate off the list price.  Anyone else having the same experiences?
  • June 18 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for amandathomas
Hi Jeff,

Your experience resonates with the conditions of the clause.  The sales price must be ≥ HUD appraised value without special permission from the SVA. :-)
  • June 19 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Can you tell me what you mean by "special permission from the SVA"?  Is there a way to get them to accept less than the appraised value?  I have an offer in on such a listing and there is 6 inches of water in the basement, floor boards are popping as a result, and in time mold will come.  My offer is less than 10% off their current list price and knowing the above they still will not move off their number.  Any thoughts/suggestions?
  • March 12 2014
  • 11Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for RayBecker7
Can anyone buy a Fannie Mae property or a HUD home?  We see quite a few of these listings and we're curious to know if just anyone with cash can buy these?
  • April 01 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Yes Jeff anyone can buy a Fannie Mae or HUD home.
  • April 05 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

my client is interested in a property listed as an REO and is states that is subject to HUD Guidelines 24 CFR 206.125? 
  • April 24 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

There is an appeals process that a buyer can work through AFTER they pay for written inspections by SPECIALISTS, ex: a licensed roofer, a licensed electrician, a certified mold specialist, etc.  I had a listing and a buyer for a house.  After going under contract for full list price, my buyer's inspections revealed no decking under metal roof, infestation with beetles, and electrical issues not to code.  He appealed and was able to purchase the property for half the list price, after 5 months of going back and forth. 
The appeals process is not for the faint at heart.
  • June 17 2014
  • 11Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Does anyone know if the seller (Fannie Mae) will pay any of the Buyer's closing costs with this condition?  I am working on one now.  Listing agent says they will do no repairs or offer any closing cost assistance "no matter what the offer price is".  I am wondering if they will pay closing costs if we tack them onto the asking price (HUD appraisal)?  The listing agent doesn't seem to willing to ask many questions for us, just wondering if anyone has had any experience.

Thank you.
  • September 08 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

how can i buy this propriety with out any  scam ?
  • October 22 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for user3964699
If these cfo206.125 properties cannot sell for the reo price, do they go to auction?
  • January 15
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for nochasfarley
IF IT IS NOT SOLD WITHIN 180 DAYS IT REVERTS TO HOMEPATH  HOME WHERE IT IS PRICED AT MARKET VALUE AND ALL OFFERS ACCEPTED AND COUNTERED.. BUY IT WHILE IT IS STILL ON HUD. YOU GET A BETTER PRICE.
  • February 07
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Is there a reason that the listing agent would only list cash in the preferred terms?
  • May 09
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for getquotes
They list cash offers only when the property needs too many repairs for a lender to finance it. They already know lender's won't finance due to condition.
  • June 04
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

So you don't have any control over what you can do with ONES OWN house? That's crap. Or is it about loaning money for the repairs? 
  • June 16
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for lisasuts
Saying "anyone can buy a HUD home" is not accurate.  During the initial bidding timeline homes are restricted to owner occupants, NO investors.  When this question is asked it generally refers to investors vs owner occupants.
 
  • June 19
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for bbrit909
How does HUD define "owner occupier" if the house is unliveable? Can I really not sell the house for 12 months?
  • June 29
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You should also note that listing agents have gotten "sneaky" on the process, by not attaching addendums to listings(which was common practice) until you go into escrow and your offer is accepted. It is at that time, they send you over an addendum, that with some, state that you cannot transfer or sell property or title for 60 or some 90 days after purchase. So investors BE AWARE. If you plan on improving the area and property just note that in section 2 part A of bank addendums they will slide that part in. Full disclosure use to be a thing of the trade. It seems with so many investors out there that listing agents now have been told not to disclose this information on MLS and only at time of escrow will you get this addendum. Not a very good practice to follow if you ask me.  Good Luck!
  • July 01
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.