HUD...I've Noticed - Posted by BR2

Posted by BR2 on March 12, 2001 at 08:06:04:

Papers were ready when I got to the realtors office. They were really busy and I was in a hurry so I just signed, got my copy, and left. I didn’t notice it until later.

HUD…I’ve Noticed - Posted by BR2

Posted by BR2 on March 09, 2001 at 17:06:14:

I’ve noticed lately that HUD is listing more homes without first being offered as owner occupied. I submitted a bid and won on a home I plan to use as a rental, but on my purchase offer it states ‘owner occupied’. Am I going to have a problem?


P.S. I was the only bidder!!! Hope I didn’t miss anything.

Thanks Guys! (nt) - Posted by BR2

Posted by BR2 on March 10, 2001 at 15:55:29:


Re: HUD…I’ve Noticed - Posted by Ron (MD)

Posted by Ron (MD) on March 10, 2001 at 11:00:50:


(It would be nice if you used a name, even a fictional one.)

Everyone’s answer below is correct. One further point. Usually HUD offers properties first to owner-occupants. However, sometimes a property was under contract, and the contract falls through (often months later). In this case, HUD sometimes (always?) puts them on the market immediately available to anyone (even sleazy investors).

However, even when a house is available to all buyers, HUD still gives preference to owner-occupant bidders. At a minimum, if two offers are the same, they will select the owner-occupant over the investor. I don’t know if they will take a lower net owner-occupant offer over an investor’s.

You said that yours was the only offer, so it shouldn’t be a problem for your agent to inform them of the error. If he doesn’t, when you go to settlement, you will be required to sign a HUD document saying that you will occupy the property.

Ron Guy

Re: HUD…I’ve Noticed - Posted by Dave T

Posted by Dave T on March 10, 2001 at 10:50:04:

As long as your financing correctly reflects your investor vs owner occupant status, you should be OK. If you are not seeking HUD Insured financing as an owner occupant, HUD should have no further interest.

If the property was truely “open to all purchasers”, and if your offer was submitted as a non-owner occupant, then your bid was fairly considered and no owner occupant was damaged.

By all means mention this “scrivener’s error” to your broker but I suspect that your bid acceptance will still stand.

Re: HUD…I’ve Noticed - Posted by Robert(N.Y.)

Posted by Robert(N.Y.) on March 10, 2001 at 04:36:09:

I’ve noticed also that HUD offers more properties upfront to investors lately.
Whenever I bid on one I make sure its open to investors also.
As long as yours was listed this way you are safe.
Check with your broker as to why that statement was on your purchase offer.
Also don’t be fooled to think you can not get caught .There are stories of where inspectors have made random inspections months later to check.And they can fine you.Also the broker could be liable for false information.
It more than likely will not happen,but there is a chance.
I read this right hear on this board,check the archive you may find this.
Good luck with the property.

Re: Are you going to have - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on March 09, 2001 at 18:12:15:

a problem?

Only if you get caught.

It is called defrauding the Federal Government. It is a Federal case.

Even though… - Posted by BR2

Posted by BR2 on March 09, 2001 at 18:56:34:

Even though it wasn’t listed by HUD as owner occupied?

Re: Even though… - Posted by Nate

Posted by Nate on March 10, 2001 at 06:36:51:

What matters is not how HUD had the home listed, but what your broker/agent who submitted the offer put on the offer.

For a house that is not listed by HUD as “owner occupant only”, non owner occupant offers are considered. But every offer still must say whether or not it is for an owner occupant or an investor. If you told your broker one and he did the other, it is he who messed up. I would alert the broker (not HUD)immediately and let him deal with the consequences.


Re: Even though… - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on March 09, 2001 at 20:20:03:

About the only way to get caught is to tell on yourself. It is a well known fact that the government does not make mistakes. So SHhhhhhhhh…

And also… - Posted by Nate

Posted by Nate on March 10, 2001 at 06:50:14:

I wanted to echo Robert’s comments that the broker could get in serious trouble if it is discovered later that you are not an owner occupant. They would almost certainly be prohibited from selling HUD homes for a while and could be subject to a fine.

That’s why I suggest you tell the broker what’s up. He is working for you but also has a large vested interest in not deceiving HUD.

I just had a somewhat similar situation. I was making offers on two HUD houses - House 1 for $55,000 and House 2 for $66,000.

Broker messed up and submitted offers of, $55,000 for House 1, and $66,000 for House 1 as well!!

House 2 ended up selling for $75,000 so that was irrelevant, but my “bid” of $66,000 for House 1 was accepted! (The next highest bid was $59,000).

So I called the broker and let him know that

  1. There was no way I would pay $66,000 for House 1.
  2. He needed to get that bid cancelled ASAP.
  3. If he didn’t suceed and I had to go to settlement, I would sue and collect from his E&O insurance carrier for the extra $11,000.

He got me a cancellation notice from HUD within a few business days.

The point is, even if your offer has been accepted, it is not too late to make corrections, especially since you were the only bidder.

Bottom line: call the broker and make a stink!

Good luck,

Re: And also… - Posted by JPiper

Posted by JPiper on March 11, 2001 at 10:52:55:

How does a broker submit an erroneous offer on your behalf without your signature on it? How did you sign an offer with an incorrect address on it?