While at REOMAC, one panel discussion covered institutionalizing short sales. More specifically, the idea was to plan for short sales from the top-down (e.g., the lender), instead of from the bottom-up (initiated by individual borrowers). [Note: 'institutionalized' is my word. I can't quite remember the term they were using, something like 'planned' or 'pre-approved']
It sounds like this is a plan that is in the works (with at least one lender) so as to mitigate losses earlier. This all ties into the idea to keep people in the homes longer and give them a more graceful exit.
I asked the panel why the lenders would not speak with the borrowers without the borrower first having to be late on their payments. (Spontaneous applause erupted from the audience.) If I understand correctly, there would have been fair lending laws that would have been violated if the lender or loan servicer were to call on their borrower without the lates already existing. (Of course, this is part of why we have the problem with loan modification companies telling people to quit making payments.) I followed up asking why, when the borrower initiated the call, the lender still wouldn't deal with it. There wasn't a good response, but there was an indication / hope we will start to see more cooperation.
However, it sounds like there is a serious movement afoot to start down this path of "pre-approved" short sales. Coming soon (in govt terms) to a lender near you.
Robert T. Boyer, Ph.D. San Diego's Finest Real Estate RobertBoyer.Realtor@gmail.com |
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