If you are an FHA buyer and you are making an offer on a foreclosed property, the lender/owner of that property may never even see your offer.

Facts to know:

-As we all know, the government guarantees many loans through FHA.

-FHA puts some sensible restrictions, usually having to do with health and safety, on properties that it will back. For condo projects, restrictions have to do with HOA finances and ratio of renters to owners. Conventional lenders have the same restrictions on townhomes/condos.

-Right now, most of the buyer groups I am working with need to "go" FHA.

- There are "mega-lister" brokers out there who have hundreds of foreclosure listings.

-I had a great experience recently with a Realtor who has a normal amount of listings, some of which are foreclosures.

- Biggest fact: If you are an FHA buyer and you are making an offer on a foreclosed property, the lender/owner of that property may never even see your offer. Here's what happened to my clients this week in the form of an email string.

First, here's my email with names changed, of course: [Mega-Lister Realtor], on Sunday my clients wrote and we submitted an offer to you on [unit in large condo building in Burbank]. I had contacted your office on Friday and was told the property was available. My clients are Mr. and Mrs. _____. The offer was close to asking and was accompanied by financial information including a pre-approval. It is an FHA offer.

I phoned your office for status on Monday and spoke to [unlicensed assistant]. She told me another offer had already been submitted and that the townhouse complex was not FHA approved. She told me this was because there were too many renters in the complex. She also said that she could not submit the offer, because your company would get "in trouble" with the lender/seller for submitting an FHA offer on an un-approved complex... The mls says nothing about accepting or not accepting FHA offers.

I am very, very familiar with this complex and have been for years. It is extremely well maintained and I believe the HOA has very healthy reserves. I also find it hard to believe that it has less than 51% owner occupancy. I will check that in the next day with the HOA management company. I have also checked FHA's website, and the complex is not listed as approved or not approved. We've all been very educated about FHA requirements lately, and I know of no reason this unit/complex could not pass those.

I know this new market is a tough one for us all. But could you please guarantee and confirm that our offer has been submitted to the seller? It is a good offer and we need to know that the seller has seen it and responded.

Please phone me or email me with any questions or concerns. Thanks very much!

And here's the email that I got back from the mega-lister Realtor: I have reviewed the property prior to marketing and my recommendation is not to accept FHA offers based on the fact that it is not approved on huds website and the HOA verbally told us that there are only 45% owner occupied units. We don't have a condo cert yet however there is no sense in any of us getting into a deal that cannot be closed... I hope you understand.

Now, it probably sounds like I just have a case of sour grapes because my clients did not get the townhome. Well, okay. But, Realtors have a legal obligation to present all offers to their sellers. And Realtors should not be making the decision about what reasonable offers their clients should see. And Realtors also have an obligation to post on an mls listing if something is not eligible for FHA funding. And it seems to me that lenders who own bad assets and are getting bailed out with tax payer funds should be looking at everything.