Short Sales - MHA guidelines will allow the lender/servicer to set the list price

Short Sales - MHA guidelines will allow the lender/servicer to set the list price

Are you familiar with the MHA guidelines regarding short sales and deeds in lieu of foreclosure?  You'd better be. 

As the Treasury Department works to streamline the short sale and deed in lieu process, lenders will begin implementing them as they bring trained loss mitigators online. 

You can review the guidelines by clicking here.

The following raised an eyebrow:

"Property Valuation: The servicer will independently establish both property value and the minimum acceptable net return in accordance with investor guidance and will provide instruction to the borrower regarding the list price and any permissible price reductions. The price may be determined based on either: (1) an appraisal performed in accordance with USPAP and/or (2) one or more Broker Price Opinions either of which must be dated within 120 days of the Short Sale Agreement."

It appears that the pricing will be taken out of the hands of the real estate professional and handed over to the loss mitigators.

This largely leaves it up to BPO agents and appraisers to determine market value.  My concern is not as much about the appraisers as much as it is about BPO agents.  This is a wildly unregulated selection process and any agent wanting or needing make a buck is after these things.  That brings the good with the bad.

Idaho state law says you have to be a broker to do a BPO but I know from the number of short sales I've done that the agents doing BPO's were in fact no brokers. 

Is this a good or a bad thing?  I guess we'll have to see how the values start coming in.  There are many other changes to the short sale process coming and I recommend you make yourself familiar with them.