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Treasury Announces Short Sale Changes

Dec 2nd, 2009
by edsmith.
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 The U.S. Treasury Department under the Making Home Affordable program has released a plan to speed up and encourage Short Sales as a means to help families avoid foreclosure. RE/MAX International has been heavily involved in efforts to streamline Short Sale proposals for over a year, and although the new guidelines aren’t everything we would hope for, they do represent a significant improvement over the current situation.
Short Sales have been difficult to close, and these new measures are a huge step in the right direction. One major highlight: A lender must give a yes or no answer to an offer within 10 days.
 
Also included: a moving allowance, incentives for sellers and lenders, commission rules, and a stipulation that releases sellers from debt liabilities.
The Treasury Department has finally announced their finalized rules for SHORT SALES under the Making Home Affordable program.
 
In a nutshell:
· Mandatory consideration of short sale after HAMP, before foreclosure
· Pre-approved terms from servicer before property listing
· 10 days for servicer to accept/reject offers

· Agents commission protected

· Incentive payments to servicers

· Relocation allowance to borrower

· Guidelines and system to try and clear second lien roadblocks

· Servicers must implement by April 5, 2010

 Unofficially, some folks at FANNIE MAE have indicated that between now and April, Fannie will be rolling out PILOT PROGRAMS in CALIFORNIA and FLORIDA that will follow similar if not exactly the same rules. Based on these pilots, Fannie and Treasury will tweak these rules as necessary before the national roll out in April.

 Here’s an initial Reuters news story <http://web04.echomail.com/web04/l.do?cid=204&mid=2192&e=rq~rq-greev.pbz&t=10703>  outlining the new policies.

Here is the announcement from Treasury <https://www.hmpadmin.com/portal/docs/news/hampupdate113009.pdf>  and the actual guidelines as published in Supplemental Directive 09-09 <https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf>

Also, here is a short article in DS News that summarizes things <http://www.dsnews.com/articles/index/treasury-releases-guidance-for-making-home-affordable-short-sales-2009-12-01>

How is a short sale better than foreclosure for a seller?

Jun 12th, 2009
by edsmith.
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We are asked this question many times each and every week. There are many advantages to the short sale, but a few of the biggest ones are: Your credit score is less severely impacted; You will not risk having a deficiency judgment filed against you; You can be eligible for a Fannie Mae loan in two years instead of five; If you have a security clearance, it should not be negatively impacted; Overall, your credit will recover much more quickly.

Additionally, while a foreclosure may remain on your credit report for 7 – 10 years, it really never goes away. It will remain in the public records forever.