Yesterday the new HAFA regulations were adopted by several lenders including Bank of America, Wells Fargo, CitiMortgage, and Chase. Matt Vernon from Bank of America short sales stated that when a homeowner is denied a loan modification under HAMP (Home Affordable Modification Program), they will be sent a letter within 30 days recommending that the home be sold as a short sale.
A short sale is when a home is sold for less than is owed on the home. It is available for a primary residence when the homeowner has a hardship such as loss of job, divorce, unexpected medical expenses, etc. The benefit of a short sale is that a persons credit will be affected only by the number of late payments and not by having a foreclosure, which can take several years to correct. The negative effects of a short sale on the credit report can be corrected within 18 months of the short sale.
It is encouraging that the banks are getting in to position to handle the short sales more efficiently. Bank of America is processing their short sales through Equator.com which assigns each task as it is due -- by the agent, homeowner and short sale negotiator. This makes it very clear what is needed next in the process.
Bank of America has partnered with RE/MAX and sees the benefit of using agents with experience in short sales to process the offers. The Certified Distressed Property Expert (CDPE) designation is the most widely recognized training an agent can obtain and more than 60% of its members are RE/MAX agents.
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