HUD home closing problems have customers frustrated

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Posted: 12:30 AM Oct 16, 2008
Last Updated: 7:14 AM Oct 16, 2008
Reporter: Sarah Platt
Email Address: sarah.platt@wndu.com

9 comments

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For those looking to buy a home, today's economy can work to their advantage, since there are a lot of good deals right now. But recently, some folks trying to buy homes, Housing and Urban Development (HUD) homes in particular, are experiencing some real frustration. It’s frustration that’s completely out of their control.

Indiana HUD officials tell Newscenter 16 that there are at least 100 people in the northern Indiana area that are fully-approved to buy their homes, are ready to close, but can't-- simply because HUD doesn't have a title company.

Village Title, HUD's closing agent, had its license temporarily revoked last week. Right now, HUD doesn't have an immediate backup plan in place for it's customers.

Wednesday night, Newscenter 16 sat down with a frustrated Rochester man who was supposed to close on his home this week, but couldn't because of the situation.

“I'm 37 and I'm going bald quick. I tell you it's driving us nuts,” explains Richard Mikesell.

Mikesell is at his wits end. With all his finances in order-- by now, Mikesell says he thought he'd have closed on his new home, but that hasn't happened yet. “We're ready to close, but HUD doesn't have a title company,” adds Mikesell.

Last week, the state of Indiana revoked the license of one of Village Title's main agents. The Indiana Department of Insurance says it's investigating the agent for account inconsistencies.

Without a title company, the situation means Mikesell's home closing is indefinitely postponed. “We've been trying to buy a HUD house, we didn't have to buy a HUD house, but we found one that was re-possessed. It's a 2004 and it was a nice place, we decided to put an offer in and we did,” says Mikesell.

Meantime, HUD officials say they are working to resolve the problem. “HUD is in the process of identifying a replacement who will continue to do HUD's business, probably projected first of next week, should be back up and running,” says John Hall, Indiana HUD Field Office Director.

For now, Mikesell says he's waiting for answers and his closing day, which he hopes comes sooner rather than later. “The people I would blame are HUD for not having a backup plan. They're in the business of buying and selling houses and for them not to have a title company, I just can't fathom it, it's like McDonald's not having a drive through.

In a phone interview with Newscenter 16 on Wednesday, HUD officials apologized for the inconvenience this may have caused people who are waiting to get into their homes. They says they're asking customers for patience as they work to get a replacement title company to get these home closings done.

A spokesperson for the Indiana Department of Insurance says this situation is an unusual case.

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Comments are posted from viewers like you and do not always reflect the views of this station.

Posted by: Ron Location: Brownsburg on Oct 23, 2008 at 09:25 PM
UhaveNOclue, You have no clue! Hud homes not only can be purchased using government backed loans, but they actually have incentives for you to use FHA for financing. Instead of the normal 3% down for FHA loans, if you are buying a HUD home the required FHA down payment is $100.00 Don't talk down to people when you are also one that has no clue. Further proof: http://www.hud.gov/offices/hsg/sfh/reo/reobuyfaq.cfm This is a link to HUDs website, clearly stating that FHA loans can be used. Last question on the page. Check it out!

Posted by: jjjjjjj Location: indiana on Oct 22, 2008 at 12:54 PM
HUD HAS NOT PAID OFF THE LOANS. GOVERMENT IS BEHIND ALL OF THIS FRAUD!! BEWARE 212 Village Green sold last year not true but they did get my $$ i threaten to sue. GOT MY REFUND ASAP.

Posted by: j Location: indiana on Oct 22, 2008 at 12:52 PM
HUD IS SELLING HOUSEs not paid off. call mr jackson huds atlanta homeownership email abroussard@hmbireo.com

Posted by: Willie Location: Niles on Oct 20, 2008 at 11:21 AM
Um, excuse me? Sorry to disappoint but I'm the one, along with all other working taxpayers, funding those "govt handout lines".

Posted by: UhaveNOclue Location: Elkhart on Oct 16, 2008 at 11:51 PM
You are beating up on the very people that are saving you TAX DOLLARS!The people buying these homes have not defaulted on anything! They are buying homes that were financed thru VA loans and other means. Hud homes CANNOT be purchased with a govt backed loan so these will never be HUD homes again.Obviously some people love to comment on things they have no idea about.Bulldozers should tear down perfectly good homes so you will never have the money paid back into the govt till. Smart!Village Title is out of Texas..why not a title company right here in Indiana? The way Hud is run (see InvestorIvan post)takes what could be a good program and ruins it.PrivateSector, it's no easier on foreclosed home thru your local bank -nothing but red tape and delays, Realtors don't want to touch them!Hope all you right wingers own your homes outright because you are one thin job away from the same thing happening to YOU!Let's see how fast you get into the govt handout lines!!!

Posted by: Bob Location: SB on Oct 16, 2008 at 03:43 PM
Calling them customers is a real stretch.

Posted by: Leave to the Private Sector on Oct 16, 2008 at 02:30 PM
There should be no HUD, there should be no Section 8 Housing. If you can't afford to live in the US, get out... You are not a contributing citizen but a leach of society. Go to a real bank and you wont have these issues.

Posted by: Willie Location: Niles on Oct 16, 2008 at 02:22 PM
Well said, Frank. And some people are clamoring for government-run health care? When has there EVER been a case of the public outperforming the private sector???

Posted by: Anonymous on Oct 16, 2008 at 02:07 PM
Yeah, let's continue to depend on the government. I'm sure Obama would just throw money at the situation and fix it!

Posted by: Frank Location: SB on Oct 16, 2008 at 11:15 AM
We can thank President Johnson for this one. Part of the great society, that enlarged the role of government and created nothing but red tape and taxes. If you think this story epitomizes government waste and inefficiency just wait until the government begins getting more involved in failed mortgages and credit institutions. Folks, sometimes the forest needs a good fire when it is so overgrown, the same is true of the housing market. The bulldozer should be employed to take of these forclosed homes, and the credit institutions that made bad loans should pay for their stupidity and greed.

Posted by: CL Location: SB on Oct 16, 2008 at 08:08 AM
I have NO IDEA how the VILLAGE IDIOTS have stayed open this long! They have NO IDEA what they are doing, how to do docs, or what customer service is! We in the mortgage business have been calling them the VILLAGE IDIOTS for YEARS! I hope they go under completely and forever!

Posted by: Investor Ivan Location: Rural St. Joseph county on Oct 16, 2008 at 05:13 AM
Say what you want, but this has been building for quite some time. I approached HUD on purchasing a home over two years ago.....had been foreclosed upon. Contacted their headquarters, and was told that it would be on the market soon and listed with a local agent. I wanted to purchase direct. That house has been sitting for 3 years, and i still cant get them to even list it so i can make an offer. The only thing i can figure is that HUD did not want any more foreclosed homes going on the market to mess up the thing they had going with other lending institutions/ banks. There are many many homes that are HUD owned that are sitting idle in your communities, that could be sold and renovated and inhabited, but they just wont list them......Are they too concerned that competition from this sector will further drive down the new housing market? Sound like a conspiracy to you? IT DOES TO ME......