“Short Sales Get a Boost”
Second mortgage holders have always been a problem, when it comes to getting a short sale approved and understandably so. They can now get up to $8,500. The treasury increased the amount that the second mortgage holder can receive by $2,500.
This is welcome news to the real estate community. Maybe now some of the short sales that have been held up can now get completed. Hopefully, this will speed up the process as well!
Treasury Change on Second Lien Release Could Boost Short Sales
By: Brian Collins
The Treasury Department’s decision to raise the amount servicers can pay second-mortgage holders for a lien release should give its short sales program a boost, according to an industry expert.
Second-lien holders can veto any short sale so Treasury raised the buyout limit by $2,500 to $8,500 in March along with other improvements to its Home Affordable Foreclosure Alternatives program.
“HAFA is really a nice program at this point,” said Travis Olsen, co-president of Loan Resolution Corp.
Since its rollout in the spring of 2010, servicers have completed 40,000 HAFA short sales. However, “the numbers have picked up a lot in the last year,” Olsen told National Mortgage News.
With the increase in the second-lien payoff limit, Olsen sees much more HAFA activity coming down the road.
“I can see numbers doubling from 40,000 to 80,000 in closed short sales in a year,” Olsen said.