HUD’s Buyer Select Program is the biggest change to HUD buying procedures since the advent of Marketing and Management 3 in 2010. Essentially, the Buyer Select Program allows buyers to chose their own closing agent. Selling agents will no longer work with a HUD designated closing agent in areas utilizing the buyer select program. Please note: HUD will NO LONGER offer to pay for the settlement.
Selling Agents Important Notes:
Explain to purchaser, if their bid does not include closing costs, they will be responsible for the Closing Agent Fee. If there are not sufficient funds remaining from the line 5 costs at closing, the buyer may still be responsible for the Closing Agent Fee.
All Earnest Money checks under the Buyer Select Program must be certified funds (Cashiers Check or US Postal Money Orders) and made payable to the Closing Agent selected.
Remit Original Earnest Money to the Listing Broker. Provide a copy of the check in the original contract package Earnest Money amounts are: $500 if the purchase price is $50,000 or lower and $1,000 if price is $50,001 and higher.
If vacant lot, EM will be 50% of the list price.
Selling Agent must complete a Buyer Select Addendum to be included with the executed contract package. IMPORTANT: THIS FORM MUST BE TYPED!
The Listing Broker will comply with HUD’s forfeiture and extension policy and only release earnest money back to the selling agent at the specific written direction of HUD or the Asset Manager.
The next important step for a selling agent is to know who the Asset Manager your accepted contract is with. Each Asset Manager has their own procedures for this program.
Closing Agent Specific Information:
INSURANCE AND OTHER GENERAL REQUIREMENTS
•HUD requires all buyer select closing agents to be covered by Errors and Omissions Insurance of at least $1, 000,000
•Must be an Attorney, Title Company or Escrow Company and follow applicable federal, state and local laws for your state
•No closing entity currently debarred, suspended, or otherwise excluded from participating in HUD transactions or federal programs, may participate in any aspect of the closing or title clearance process
•Closing entities who have, or whose immediate family member, or business associates have, a financial interest in the property not be involved in the closing process
•Failure to adhere to HUD requirements or guidance will result in sanctions included, but not limited to, financial penalties and or being banned from closing on HUD properties.
OBTAINING A TITLE I.D.
The updated sales contract package includes a new Buyer Select Addendum. The Buyer Select Addendum is to be submitted to Asset Manager with the sales contract for all winning bidders Please submit a copy of E&O insurance and state license for the closing entity with each sales contract.
Once Asset Manager has received the sales contract, we will request the title I.D. from HUD Not submitting the buyer select addendum and the supporting license and insurance will lead to a delay in contract execution. Form must be legible.
Closing Entities with multiple offices, must have a Title I.D. for each office address. This identification number is used to track the number of closings each closing agents office has active, number of days from assignment to closing, delays with closings and confirm time frames are met.
HUD Approved Closing Agents: (Not A Complete List)
Hocker & Associates LLC- Closing Agent ID: HOCKER0001
6626 E. 75th St. Suite 410 Indianapolis IN 46250
Island Title Services- HUD Title ID# ISLAND0002
1719 S. Florida Avenue, Lakeland, FL 33803
Lawyers Advantage Title Group- HUD Title ID# LAWYER0022 a
225 S. Westmonte Drive, Suite 1100, Altamonte Springs, Fl 32714
Alan Sandler/Karen Sandler
First American Title Insurance Company
3411 Bonita Beach Rd., Suite 302, Bonita Springs, FL 34134
Attn: Wade Abed