For those of you that have not seen Group 46:10 or shortsalepowerhour.com in the past, Kevin and Fred are rather casual. So, if you do not care for their dress or appearance, we hope that you at least collect some high-quality information from their content.
Today Kevin and Fred would like to speak about a method called padding the HUD and the entire title section of the short sale transaction. In particular, we’ll give you a few details in relation to padding the HUD with the next few episodes that follow relating to other specific tactics with your title officer.
Recognize, when we use the term ‘padding’ we are referring to the estimation of the fees that you put on your original HUD. The reason for doing this is that banks like to strip away and negotiate fees even when they do not have to.
When you pad a HUD you are building a win for the lender because they get to eliminate some fees and they feel better about the transaction. A lender may tell you that they don’t strip fees away, but try sending in a HUD with the least possible fees on it and see if the lender tries to strip some of those fees away. You will quickly learn your lesson.
In fact, you may not be able to send an accurate HUD because of the variable closing date. Many things are estimated like home owners association fees, taxes, and other small fees. Truthfully, if there weren’t any counteroffers this possibly wouldn’t be needed. There were a lot of occasions in the beginning of this business where Kevin and Fred did not pad the HUD and ended up taking a hit on their commission.
The last thing that you have to remember is that padding is not illegal or dishonest. Much like a home buyer that can afford $200,000, but makes an offer at $190,000, they are just protecting their interests.
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