One of the casualties of the slower economy and market and higher unemployment is the upswing the number of foreclosures. For the entire year of 2001 in Larimer county there where 9 foreclosures. Through mid December 2002 there had been 16.

According to the Colorado/Wyoming regional HUD representative Kathy Mahaffey of Re/MAX First there has been an increase in the number of HUD homes in Colorado as well. In 2001 there was a total of 315, through mid December 2002 there was 506.

When a borrower takes out a FHA loan it is insured through the mortgage insurance back by the federal government. Each borrower taking out an FHA loan pays an insurance premium that goes into a pool to help pay for any foreclosures claims. If an FHA loan subsequently were foreclosed upon, the mortgage lender who is servicing the loan would file an insurance claim with HUD. HUD pays off the insured loan balance with the money from the paid insurance premiums and the title to the property is transferred to HUD.

Today HUD has arranged with management and marketing contractors to begin the process of maintaining and selling the acquired properties according to HUD guidelines. In 25 states, including Colorado, the maintenance and marketing is handled by First Preston foreclosure specialists. All HUD homes are listed on the Internet at www.firstpreston.com. This website is full of information on the process, and provides all the current listings. This lists HUD acquired homes that are being prepared for the market, active on the market, and under contract. The Broker Handbook contains comprehensive information for real estate licensees and the public.

Realtors have all received calls from people who spot the small sign in the window indicating it is a HUD home. How you can go to the first Preston web site to determine whether the home is on the market or being prepared for the market. Broad listing specialist Kathey Mahaffey of Re/MAX first associates south is responsible for listing HUD owned homes for sale in the appropriate multi-list system (MLS) in Colorado. She can answer questions from agents and buyers wanting to know more about the process. Her phone number is 970-226-3990.

Any qualified buyer regardless of race, creed, color, sex, national origin, handicap or familial status can buy a HUD owned home. Buyers must work with a registered HUD real estate broker to bid and the buyer must be pre-qualified for the loan they will need to purchase the home. The pre-qualification process must include a review of the buyer's in-file credit report.

Bids on first Preston are submitted to first Preston electronically. Using HUD guidelines and restrictions, first Preston "acknowledges the bid that presents the highest net offer to HUD". New listings are posted Thursday of each week. Price reductions are posted on Friday of each week. For the first 10 calendar days after a home is listed, only owner occupied bids are considered. After the first ten days, first Preston considers non-owner occupant bids. If the property remains unsold, first Preston evaluates the pricing. If you are a successful bidder it will be posted on the internet. Your broker will need to overnight your signed HUD contract, copy of a certified check or money order for earnest money, and all the appropriate signed addenda to first Preston. A sampling of other bids received is also posted to give you an idea of how the bidding went.

Sales must close within 45 days. Extensions beyond this will require a fee and a written approval. Buyers have 15 days from the date of the seller signature on the sales agreement to get the home inspected with the utilities on, all at the buyers expense. Homes are sold "as is" HUD does not make repairs, however, under certain condition, the buyer may cancel the ale. Earnest money may be returned to the purchaser if the guidelines are met and the proper procedures are followed.

In order to sell HUD homes and be paid up to 5% in commission at closing, brokers must have completed the appropriate HUD participation and information forms and receive a NAID (name address identifier) number. This is not difficult however the process can take a couple of weeks. Approved non-profit corporations can purchase these properties as well, and they do have some special benefits and discounts that a private party would not have.

For further information go to www.firstpreston.com or contract any registered real estate brokers office.