Information Regarding Your REO Purchase From HUD

LOCATION OF CLOSING
We will make every effort to close your transaction at the location that the purchaser chooses. The purchaser may choose another title company to close the transaction, the fee that the other title company charges is the purchaser’s responsibility to pay. Most cash transactions can be closed by us at the real estate office thereby incurring no additional closing fee to the purchaser.

TITLE INSURANCE
Since HUD does not provide or pay for title insurance with these sales, the purchaser has the choice of purchasing it or not, as well as where they purchase it from. You may order from your local title company (provide a copy with the invoice to us for inclusion on the HUD1 settlement statement), or you can order it from this office, as we are a First American Title Insurance Agency (click here to see our current rates). Once again it will be a cost to the purchaser and this cost can be charged against line 5 of the contract if there are sufficient funds to cover it or used against an eligible sales incentive amount.

SELLER PAID CLOSING COSTS
If you have placed an amount in line 5 of your sales contract as seller paid closing costs, following are some of the things that can be charged against it:

• Credit Report Up to $35.00.

• Appraisal Fee if it is for an FHA 203(k) loan that is necessary to determine the “after rehab” value. Flood Certification if the property is offered with FHA insurance AND is in a Flood Plain.

• Home Inspections WITH INVOICE (Full Inspection Report may be required).

• Loan Discount Points – Up to 3% of the 1st Mortgage Loan Amount WITH a Certification Letter from the Lender. (Maximum not to exceed 3% of the lower of the loan amount or the purchase price. Payment to a Mortgage broker ok, but can’t pay to a Mortgage Broker if being paid to a Lender too.)

• Loan Origination Fees – Up to 1%(on Conventional Loans) and up to 1.5%(on FHA 203(k) loans). (Maximum not to exceed 1% of the lower of the loan amount or the purchase price on Conventional loans or 1.5% of the lower of the loan amount or the purchase price on FHA 203(k) loans.) Payment to a Mortgage broker ok, but can’t pay to a Mortgage Broker if being paid to a Lender too.

• Mortgage Recording Fees – 1st Mortgage only.

• Survey – IF required by the lender.

• Title Insurance – for Owners Policy and Mortgage Policy.

• Homeowners Warranty up to $350.00.

• Prepaid Interest – as required by lender not to exceed 30 days(Owner Occupant only).

• Lender Escrow – (Owner Occupant only).

TAX PRORATIONS
We will prorate taxes according to local custom. Please let us know your area’s customary method of proration when we schedule the closing.

FUNDS FOR CLOSING
WE CAN ACCEPT ONLY WIRE TRANSFERS OR CERTIFIED CHECKS FOR PURCHASER FUNDS AND EARNEST MONEY DEPOSITS MADE PAYABLE TO: OTSEGO COUNTY ABSTRACT COMPANY. Unfortunately, if you or your purchaser arrives at the closing without certified funds or a verified receipt for your wire, we will have to re-schedule for our next available date. If you are using your local title company, please follow their directions for your funds.

We will be happy to schedule your closing once we have all the necessary documentation in the file including required inspections, ACRs, Affidavits, Bonds, Condo documents, Tax Information, Unpaid water/lienable items, and Title Insurance (if buyer is purchasing).