Sales of government-owned REOs have been delayed in some New England states, but ""HUD"":http://www.hud.gov says it's working to expedite a fix.
Closings in Connecticut, Rhode Island, Maine, and Vermont are expected to begin later this month. In Massachusetts and New Hampshire, REO closings have already resumed.
According to HUD, buyer demand for its properties has been so great, it has already exhausted the money that was allocated to cover third-party disposition fees to attorneys and other closing agents in some states.
""It is not a shortage of funds,"" HUD spokesman Lemar Wooley explained. ""Closing on approved purchases of HUD-owned properties has been temporarily delayed in some areas due to increased demands. Funds for closing contracts in these areas have been expended and HUD is[COLUMN_BREAK]
currently negotiating new contracts, or adding funds to existing agent contracts.""
Local Realtors say it has put them in a difficult and frustrating position because even buyers offering the full listing price have been put on hold. The ""National Association of Realtors"":http://www.realtor.org described it as ""a nonsensical situation.""
According to a _Wall Street Journal_ report, more than 540 properties in New England have been affected.
Wooley says though that as soon as the additional funding is put into place, closings will resume.
In the meantime, all contracts will be extended when necessary, at no cost to the buyer. Purchasers will be advised as soon as funding becomes available and a closing date will be established.
HUD has already added funds to the existing closing agent contracts for Massachusetts and New Hampshire to extend these agreements for six months. In these states, REO closings have resumed.
In Connecticut and Rhode Island, new contracts are expected to be awarded the week of July 11th, after which closings will resume.
In Maine and Vermont, HUD solicited and received several contract proposals which are now being reviewed by the agency's Office of the Chief Procurement Officer. Closings should restart within two to three weeks.
Wooley says as this time, the situation appears to be contained in the Northeast.