Hello, I a Realtor in Eugene, Oregon. I need help determining if the actions of HUD
asset manager BLB Resources is lawful under federal regulations and HUD policy. This is time sensitive, with an answer needed ASAP.
I submitted a bid on this HUD-owned home on behalf of my son, who would be an owner occupant. http://www.hudhomestore.com/Listing/PropertyDetails.aspx?caseNumber=431-452803
The bid was submitted during the initial 5-day period that was open only to owner-occ buyers. The bid was for $16,000 over asking price, and was all cash. It was specifically labeled as intended to be held as a back-up offers, in the event a higher offer was submitted.
Shortly after submittal, I received a notice that another bid was higher, and had been selected.
But four days later (yesterday), I received another notice saying the property had been relisted for sale. Sure enough, the home was back on the HUD store this morning. Only this time, bids were being accepted from ALL buyers, not just owner-occ.
I called asset manager BLB Resources, and asked what happened. I was told that the winning bidder had backed out. This is easy to do, since all that’s needed to make a bid is name, SSN and price. No earnest money, no binding commitment.
I why my son’s bid was not accepted, since it was labeled as a backup offer
, exceeded the HUD ask price, and was (according to BLB) the highest after the failed bid was withdrawn. I was told that instead of taking it was a backup offer, BLB had cancelled it instead. Therefore, with no winning bids in the initial 5-day period, the home was now eligible to enter the open market, free of the owner-occ restriction.
I was advised that BLB had the power to decide not to accept backup offers, and that HUD policy was not to take backups on HUD “uninsurable” homes, which this one is. However, when I pressed them for where they obtained their authority, for how they knew HUD wanted my son’s bid discarded, all they could tell me was that this was standard HUD practice.
I was advised that our only option is to resubmit a new bid, and it would be re-evaluated. However, with the property now open to investors, it’s doubtful we could prevail.
I am not seeing how BLB’s actions square with HUD regulations, that specify that owner-occs are to be given priority. That higher bid that beat my son’s bid was not real. In fact, it may have even been fraudulent – made with the express intention of knocking out the owner-occ bid period and opening it up to investors.
I want BLB to accept my son’s bid, and not proceed with accepting new bids. Help please – do you see anything in the CFRs that make BLB’s actions challengeable? See CFR subsections (a) and (c). CFR rules are here: https://www.law.cornell.edu/cfr/text/24/291.205
Asset manager handbook is here, see especially bottom of page 27: https://blbresources.com/dlforms/OR/OR_BSP_SellingBrokerHandbook.pdf