Just read this post by Dominick Pallini. Great information that everyone thinking of doing a short sale as well as agents working in short sales needs to know!
We knew this was comming. Bad news for all those Short Sellers.
Lenders unload mortgages to collection agencies
ORLANDO, Fla. - April 21, 2010 - Lenders are selling second mortgages and home-equity lines in default to collection agencies that have the right to collect this money potentially for decades.
"It's a big business, and investors are coming out of the woodwork," says Sylvia Alayon, a vice president for Consumer Mortgage Audit Center, which analyzes mortgage documents for lenders, advocacy groups, and attorneys.
Real estate professionals will be doing their short-sale clients a big favor if they urge them to get professional advice before they sign agreements, Alayon says.
A new government short-sale program aims to prevent banks from reselling this debt. Sellers covered under the program will receive notice that secondary lien holders have received part of the proceeds of the sale "in exchange for release and full satisfaction of their liens."
Source McClatchy/Tribune News, Jim Wasserman (04/19/2010)