Well, 21 hours ago The U.S. Treasury set  the long-awaited guide lines on a plan for mortgage companies to speed up "short sales" of homes to stem a rising tide of foreclosures.  These guide lines address the problems that have often caused Realtors, buyers and sellers to avoid short sales.   The new guidelines will set limits on the time it takes a bank to approve an offer.  Mortgage servicers will have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.

It also prohibits mortgage servicing companies from reducing real estate commissions on the sale.  This is great news for all those hard working Realtors who have spent months and months on a short sale only to have their commission cut to 3% or 4% to finally close.

The financial incentives for completing short sales will include a $1,000 payment to servicers, and a $1,000 payment to investors who sign off on payments to subordinate lien holders.  The Borrowers can also get up to$1,500 in relocation reimbursements.

But the one I like best is that the guide lines caps the aggregate proceeds to subordinate lien holders at $3,000. I have seen to many short sales tanked by greedy 2nd's who think they have the 1st over a barrel.  I just closed on a short sale where the 2nd (Chase) wanted 10k on a 20K note.  Can you say GREEDY.  They actual got 7K, with both Realtors and myself having to kick in over 5K to get the deal done.  This was the 4rd buyer on this property.  The previous 3 all walked ... BUT THAT IS ANOTHER STORY FOR ANOTHER BLOG.

I myself am going to be eagerly waiting to see how quickly these guidelines are implemented and actually impact the time line of your typical short sale.

Hopefully

Dawn Uselding

 
This post has been included in Wisconsin Real Estate News
Post is included in group: Short Sale Support Group
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54 Comments on Let's Hope Short Sales Become More Timely

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DEC
02
2009
1,549,853 Points 277 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Dawn- I just looked through this paperwork! WOW! 43 pages of red tape, complicated to say the least! I am wondering who is going to be trained to decipher all of this! I am going to read every word of it tomorrow. I just get that icky feeling in my tummy about now! Katerina 

BTW- Congrats on your feature and gold star! 
1:36am • #35
1,549,853 Points 277 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Another thought about the time element agents complain about in short sales. 

I was first licensed when there were no fax machines, no cell phones, no personal computers. The buyers had to wait until the bank had their committee meeting and their name came up for review for a loan. The answers would come through snail mail. Even telegraphs were quite expensive so rarely used. It took an average of 4 months and most of the time 5 or 6 months to close on house. If it was a VA loan, it would take longer. So we don't have much to complain about these days. As long as we get our short sale listings closed, we are doing fine. We just have to be more prepared and budget wiser. 

Who said this was supposed to be a cake walk anyhow? 

Of course, the horrible lack of customer service at Bank of America is another issue altogether! It is one thing to need time to get a short sale down the path to approval, quite another to be incompetent, inept and downright ignorant in how to run a business. 
1:45am • #36
125,787 Points

Thanks fo r the update. Good post. Will have to see how the servicesor adjust to changes

Have a great day

Tony
5:48am • #37
1 Featured Post

Wow - I didn't know I had been featured!  Thanks Katerina for bringing to the table a rounded point of view.  If we run around with the mind set of "Big Bad Nasty Banks" we do ourselves and our clients a disservice.  The people at the end of our call or email to our servicer are just like us - doing a job, trying to make ends meet.  And the lenders do have a fiscal responsibility to their shareholders to be diligent and handle these investments wisely.

On the other hand, it is hard to feel empathy for some serivcers that continue to be inept in the  processing of short sales.
8:07am • #38
1 Featured Post

Katerina -I don't think I am featured.  Wow , I got excited there for a moment, didn't even know I cared. 
8:35am • #39
163,620 Points 3 Featured Posts Called Shot Master

If this becomes somewhat of a standard, then it will be a much easier process for everybody involved.  This looks similar to the FHA Pre Foreclosure Sale program, in that there is a provision for a relocation allowance and a net to the seller that is based upon a current valuation.  And of course there are relatively short time frames for the decision process.  Even the investors who are being asked to take a loss will have a set of standards with which to measure any proposed transaction.  It will be interesting to follow this.
8:44am • #40
1,549,853 Points 277 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Dawn- Yes you are featured. That gold star is still there:) Congrats! 
9:36am • #41
260,977 Points 10 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Dawn - I have several short sales I am negotiating right now that are trying to cut my commission. It really burns my hide. Can you send me a link to where you pulled your info so I can make some phone calls and stir up some good old fashioned American crapola this morning? :-) Thanks!
10:38am • #42
Outside Blog

this all sounds good etc but it will be one of those things to see just how it will work out since so many govt ideas have not been all to helpfull lately
12:47pm • #43

Dawn, How wonderful, if only it would come true, thank you so much for the information. have a great evening Barbara
6:58pm • #44
939,387 Points 94 Featured Posts Outside Blog Attended Rain Camp

I need to read the 43 page directive tonight so I can get up to speed. Are you gonna buy the Gucci bag?
8:22pm • #45

Interested to see how things pan out. Thanks
8:45pm • #46
1 Featured Post

Melissa - I am currently reading and blogging on each section of the directive.  Check it out.  No - no bag for me!
8:57pm • #47
1,417,262 Points 52 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Ten days sounds unrealisitcally short (no pun intended). I hope the process will improve, but I'm not banking on it (OK, that time pun intended)!
9:00pm • #48
136,015 Points

As you said, it will take Congress to put some teeth into this. I just don't think they can pass a law to force someone to give up part of a legal deal.

We tend to forget that they are losing money on these deals.
9:47pm • #49
1,348,164 Points 41 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I like to think that this will work well, but I am skeptical.

Wachovia works well because they are a portfolio lender and don't have to deal with investors.
11:42pm • #50
DEC
03
2009

We will see how much this really affects our day to day business. Very little of what is passed seems to have a real positive impact on what we do.
12:42am • #51
1,388,172 Points 27 Featured Posts Hit Router Called Shot Master

Dawn, I've been given this hope before.  I'd like to see this work, but I have my doubts.  Thanks for posting this one though.
6:49am • #52
163,620 Points 3 Featured Posts Called Shot Master

I think it would be very good to read the document with a pen handy to make notes in the margins.  They want loan modifications, and then short sales after a loan mod has been looked at or tried.  I don't see where lenders are forced to participate.  As with other proposals, this is a proposal.  It will be several months before it takes effect.  So it would be good on any short sale situation to know what procedure is in effect for that short sale.  Some people look at a proposal and act as if it is already in effect.
9:28am • #53
1 Featured Post

Dan - your right everyone should take the time to understand this directive.  You can ask the servicer you are working with if they are participating.  If they are you need to know how the program works.  I am bloggin on each section of the Supplemental Directive.  However no one is visiting them.  They are dry but informative.   I believe it is our duty to know the programs out there and how to navigate them, so we can represent our clients to the best of our ability.
10:47am • #54

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Dawn Uselding Short Sale Assistant

Manitowoc, WI

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A New Dawn Real Estate Services, LLC

Address: 10309 Middle Rd, Manitowoc, WI , 54220

Office Phone: (262) 573-6309

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