Posted by: Meena Gujral | March 30, 2010

The New Short Sales Guidelines

Homeowner’s, lenders and real estate professionals are expected to keep close attention on us because of short sales. This is a fact of life even now that it was projected to have about one for every ten properties to be categorized as short sale in this year alone.

Most people will turn to loan modifications but not all of them will really benefit from it. Some homeowners are not capable of qualifying under the Making Home Affordable program. This might either be due to their income or the level of debt they have incurred. Given this scenario, most homeowners may have to resort to foreclosure of their property. Recent changes in the real estate business have turned things from the way they used to be. Lenders are now allowing more homeowners to qualify for short sales than foreclosure of their houses. The property will have to be sold at a price lower than the actual amount borrowed for the house. This can still incur losses on the part of the bank but is far better than acquiring the property itself. Short sale will become a better option than foreclosing a property. It will rid the bank from going through much in disposing the property on its own effort.

It is understood that even if short sale is far better than foreclosure, it will take a lot of time for lenders to recall the amount expected from its sale. Not to mention the fuss it brings to every entity involved in the process. Short sales will usually take as much as 3 to 6 months before actually closing a deal. This is the reason why most people would think short sale is not a good option.

However, this would not be the case for long. Come April of this year, the Home Affordable Foreclosure Alternatives Program will finally be revised. An upgraded guideline under the program has recently been issued and will put into effect in the second quarter of this year. The guidelines aim to improve the short sale process and dramatically decrease the hang-ups that have long been bothering the lenders today. A lot of funds can be saved for the repairs and renovations that may be required due to neglect on the property.

Here are the recent revisions you must need to be aware of:

1. A lot of time will be saved by sellers and real estate professionals because short sale terms of the property will have to be pre-approved first before it can be listed. Lenders will also be notified of the minimum net proceeds from the short sale of the property.

2. Short sale request must be approved or disapproved by mortgage servicers after just about 10 days. Reduction on the documents required will also diminish the existing problems it brings.

3. Real estate professionals’ incentive will be protected since the new guidelines have now prohibited the loan servicers from requiring certain reductions in their commissions. That’s good news to all real estate agents who have been exerting a lot of effort. Who would want any better than that?

4. Relocation assistance incentive amounting to $ 1500 will also be provided to the homeowners. The amount is enough consolation for people who will have to lose their home.

5. The new guidelines also require the borrowers to completely free the borrower from future liability for the first mortgage debt.

6. Mortgage servicers will also enjoy an incentive amounting to $1000 for every closed transaction.

If you are looking to sell your home in a short sale and are looking for a short sale specialist to help you, please call Meena at 510-279-9580. I have a 100% success rate in closing all my short sales. You can also go to my website at: http://www.helpusellachievers.com

To see my Real Estate Blogs click:

 Fremont Homes Blog

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