Let's Hope Short Sales Become More Timely

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