Efforts To Streamline Short Sale Process Underway
HOME LOANS, INDUSTRY NEWS, REAL ESTATE LEGISLATION, SHORT SALES, TIPS FOR SELLERS
March 12th, 2010
Lenders, loan servicing companies and homeowners have been fighting over how to deal with mortgages that are underwater. According to a recent article in the New York Times “more than 5 million households are behind in their mortgages and risk foreclosure”. The Obama administration has targeted billions for loan modification programs that have helped very few.
A new program to be launched April 5 will attempt to help homeowners unload their homes using the short sale process. The program aims to streamline and standardize the process by establishing some ground rules for determining who gets how much. The benefits this program is intended to create include:
- More net proceeds to the investor doing a short sale than a foreclosure
- Set amount of cash for the loan servicer ($1,000)
- A predetermined amount for second lienholders, if any ($1,000)
- Less damage to the home owner’s credit rating
- Relocation money for the homeowner ($1,500)
- Assurance from lender the homeowner will not be sued for any dollar deficiency
- Fewer empty homes waiting to be foreclosed upon
Real estate agents would be used to establish the home’s current fair market value. This value estimate would not be shared with the homeowner but if an offer meets or exceeds the indicated value, the lender must accept the offer. Lenders want proof the homeowner has done everything possible to keep the home including trying to sell the home or utilized available savings to make payments.
Those of us that have handled short sales know how frustrating the process can be for homeowners, title companies, lenders and loan servicing companies. Some are easy to work with while others have made the process very difficult and time consuming. It’s not unusal to have the first couple of buyers fall by the wayside before the investor wakes up and agrees to a short sale. Any help by the federal government to regulate the process is welcomed by real estate professionals.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
