Will new U. S. Treasury guidlines lift dark cloud over short sales and help spur our current housing market?
Mention the words short sale to many a realtor or potential buyer and watch how their demeanor and expression instantly changes to one of frustration, and bewilderment.
I processed my first short sale at the beginning of 2008 without the aid of a mitigation company, dealing with the bank, seller, and a buyers agent myself… by no means would I attempt this today; knowing what I know about short sales and how the banks have become bogged down with thousands of files and the work involved in getting a short sale approved. Still, a short sale is in my opinion the most viable solution and alternative to a foreclosure after a loan modification has failed and in a market where buyers are looking for bargains a definite alternative to the multiple offer scenario that ultimately occurs when a foreclosure does hit the market.
Thanks to new guidelines implemented as part of the Home Affordable Modification Program, this may all become a thing of the past.
Now as with most things political and government-run the first hurdle is understanding how it all works, you can read the all 43 pages here: Introduction of Home Affordable Foreclosure Alternatives – Short Sale and Died in Lieu of Foreclosure
However, you can thank the Miami Heralds Jan 13, 2010 business section and Paul Owers for the following guidelines and key provisions:
- The lender must respond to short sale offers within 10 business days.
- The seller won’t have to pay back any amount of mortgage debt.
- The seller is entitled to a relocation incentive of $1,500 which will be deducted from the proceeds at closing
- The lender will be paid $1,000 for allowing up to $3,000 to be distributed to less -senior lien holders
- The lender can’t require a reduction in the agreed upon real estate commission as a condition of approving the short sale
