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Short Sale Federal Program To Start April 5th, 2010

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Real Estate Agent with Douglas Elliman Real Estate in Babylon NY

Short Sale Federal Program To Start April 5th, 2010

For those of you that do not know, the Obama administration is trying to encourage home owners to take the short sale route to avoid foreclosure.

In short, (no pun intended :)) a short sale is when you have to sell your home for less than what you owe on your mortgage. It's also better on your credit than a foreclosure. As of now, it will take 3 to 5 years before you can get a mortgage. With a foreclosure, you are looking at, at least 10 years or more before you can get another mortgage.

This new short sale program is also to curtail fraud among the mortgage banking system.

Beginning April 5th, lenders will have to consult with real estate practicioners to assess home values and a minimum acceptable offer. Then they must accept any offer that is equal to or higher than the assessed home value. Right now, banks will not divulge the minimum they will take until an offer on the home is presented. If the bank feels the offer is too low, then they will negotiate to try to get a higher price.

The program will also offer a cash payment to the home owner, as well as to the servicer and a second lien-holder, and will protect future lender lawsuits for the unpaid mortgage balance.

Over the next 6 months or so, we'll see how it goes. It's going to be interesting for sure!

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Ken's Home Team LLC. | 360.609.0226 | Portland, OR & Vancouver, WA Real Estate Team
Ken's Home Team LLC. - Vancouver, WA
- SOLD IS OUR FAVORITE 4 LETTER WORD -

I have not seen this do you have a refrence for this info? please let me know at ken.rosengren@comcast.net

Mar 08, 2010 07:47 AM
Craig Rutman
Helping people in transition - Cary, NC
Raleigh, Cary, Apex area Realtor

It has to be better than the system that's currently in place. I have a short sale offer written that I've been waiting 3 months for an answer on!

I know the process, but if banks have agreed to a short sale condition, know they're going to lose money on the sale, how many rocket scientists does it take to decide how much they want to lose and when they want to lose it?

Does it really take 3 months or longer to make that decision?

Mar 08, 2010 07:49 AM
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi Craig, Holy Craig that is way too long! And no, it shouldn't take any longer than a regular resale. Banks are sometimes not smart. It costs them so much more to do a foreclosure than a short sale. I think they try to hold out for that golden cash offer at top dollar. Ha, not going to happen.

I have a short sale that is not approved since 12/23/09 because bank #2 wants 5k more than bank #1 wants to give and it's an all CASH offer at the asking price.This house could end up going to foreclosure all because bank #2 is stubborn as a mule. Then they won't get a dime. The homeowner's credit will really be ruined and that will be ok with the bank. Sounds more like revenge to me.

And if these banks were rocket scientists Craig, our deals would go through faster.

Mar 08, 2010 07:57 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Jackie, I didn't know any of that and this information comes at a good time to advise someone on what they should do with a short sale they've waited a long time for.  I hope I can send her your post....

Mar 08, 2010 10:33 AM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Jackie - I'm in agreement with Craig.  I did one short sale with a cash buyer.  The seller's agent was holding a letter stating they would accept $ 300,000.  They first buyer walked.  My buyer was second.   She agreed to pay the $ 300,000 cash.  We did the inspections and found an illegal room, so she asked for money off.  After two months, B of A came back and wanted $ 15,000 more!  She walked too!  What was the sense of this?

Mar 08, 2010 12:39 PM
Toula Rosebrock
Diane Turton, Realtors, Forked River, NJ - Lacey Township, NJ
Broker/Sales Associate, Realtor, Lacey Township,

Hi Jackie:

This is the first I'm hearing about this...

You're right...it's going to be a "wait and see".

Mar 08, 2010 01:28 PM
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi Carole, I actually thought this program was on the back burner since I wasn't hearing anything about it until yesterday. I hope it will help your friend.

Hi Elyse, Because banks are trying to get as much as possible for these homes. I really hope this new program will work. It will certainly make our lives easier. Or at least I hope it does. It's going to be a wait and see game.

Hi Toula, Wait and see is right. I tried doing research as to what would happen if these banks don't comply. I haven't found anything about that............YET. I'm still working on it.

Mar 08, 2010 10:52 PM
Herbert Cortes
Patchogue, NY

Jackie I represent a New York Investment Fund and we buy short sales cash.  Give me a call with your listing at 631-523-1411.  We can work out a win win win for all.

May 05, 2010 08:17 AM
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