This chapter refers to a property owned by a government agency, i.e. HUD, Fannie Mae, VA, Freddie Mac, or that has been or will be foreclosed on and the purchase price is not sufficient to satisfy the mortgage balance. The existing mortgage is insured by the Secretary of HUD. Most of the items in chapter 2016.125 refer to the seller and lender. A buyer should know that buying a property that is under foreclosure may take longer to complete than a traditional sale.
Click here to view the entire chapter 206.125
Below are few points extracted from the chapter that are closer related to a buyer. A mortgagee should read the entire chapter to learn what their obligations are under this chapter.
- property sale price to be at least 95% of the appraised value
- seller to be provided with a deed in lieu of foreclosure, if the foreclosure proceedings have not been started
- The mortgagor shall have 30 days in which to comply with the preceding sentence, or correct the matter which resulted in the mortgage coming due and payable, before a foreclosure proceeding is begun
- Even after a foreclosure proceeding is begun, the mortgagee shall permit the mortgagor to correct the condition which resulted in the mortgage coming due and payable and to reinstate the mortgage…