What is a short sale and How Will the New Legislation Affect You?
In the past, short sales were far from actually being short, if at all. However, now that federal legislation has taken place, there are some changes that will be implemented. These changes will affect sellers who qualify, and if executed properly by lenders, has the potential to reform the short sale process.
The short sale definition is when a lender agrees to accept an offer from a buyer that is less than what the seller owes on the mortgage. One of the most prevalent dissatisfactions about the short sale process for homeowners trying to sell is the amount of paperwork involved and the time it takes lenders to make a decision about them. Under the new legislation, for sellers who qualify, loan servicers would have to accept or deny the offer within 10 business days. Lenders would also have to give sellers the maximum price they will accept before the listing goes up. In addition, under this new program, sellers would not have to pay the difference between the mortgage and sale price. All second mortgages and liens would be forgiven.
For a homeowner to qualify for this new short sale program, they have to prove it is their primary residence, have a first lien mortgage originated before 2009, and their mortgage must be delinquent, or a default must be reasonably predictable. In addition, their unpaid principal balance must be no more than $729,750, and their total monthly payment must exceed 31 percent of their gross income.
If you have any questions about the real estate short sale process, please Contact us at 813-345-4158 and one of our team members will guide you through the process.
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