YAY! Finally, the buyer can choose their own closing attorney on HUD transactions without having to go through all the rigmarole that we have been put through when attempting a 3rd party closing through the HUD Designated Closing Attorney. The process has already begun and here's what you need to know as a buyer or selling agent to make your HUD transaction smooth.
1. Closing agents (attorney's) must register for a Closing Agent ID # through HUD. The process to do this is as simple as being the closing attorney on a HUD contract. The closing attorney will need to provide a copy of their $1 Mill E/O Insurance and a copy of their state Bar License to the selling agent to include with the contract package. NOTE: This will only have to be done once. HUD will issue a BSCA ID# to a firm after receiving their E/O ins and License and from that point forward, you will only need that ID# on the contract package.
2. Buyers and their agents will be responsible for choosing competent attorney/Closers to get the closing done prior to contract expiration date. Extensions will not be granted due to Attorney delays. Be clear to your buyer and to their attorney that HUD works on deadlines and will not compromise those deadlines to accommodate them. (ex: HOA and other bill payments must be requested 10 days ahead of closing, HUD-1 Settlement statements have to be sent to the Asset Manager for approval 5 days before closing for seller approval, If no clear title, HUD will not reimburse the cost of the title exam)
3. Without a designated closing agent, there will be some changes to the handling of money associated with HUD transactions. Each Asset Manager has their own procedure for Earnest money so pay close attention to who the AM is on each deal!
PEMCO - E/M payable to CLOSING ATTORNEY but delivered to LISTING AGENT
HOME TELOS- E/M payable to CLOSING ATTORNEY but delivered to LISTING AGENT
OFORI- E/M payable to the LISTING AGENT and delivered to LISTING AGENT
BE SURE THE E/M IS PAYABLE TO THE *** LEGAL, REGISTERED NAME*** OF THE HOLDER AND DELIVERED TO THE CORRECT LISTING COMPANY!!!
This process is in effect NOW! If you or your buyer is unsure of how to proceed with their contract package, DONT GUESS!!! CONTACT THE LISTING AGENT FOR ASSISTANCE!