Treasury
Streamlines,
Simplifies Short
Sale Process
The U.S.
Treasury plan to
help homeowners
avoid
foreclosure,
announced on
Nov. 30, is
many-faceted:
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It
provides
incentives
to
lenders
and
borrowers
for
completing
Short
Sales.
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• |
It
streamlines
and
standardizes
the
documentation
necessary
for
Short
Sales.
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• |
It
limits
the
ability
of
subordinate
lien-holders
to
obstruct
the
Short
Sales
process.
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• |
It
sets
limits
on
the
time
it
takes
lenders
to
approve
or
reject
Short
Sales
requests.
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• |
It
steps
up
pressure
on
lenders
to
make
permanent
the
650,000
trial
loan
modifications
they
started
earlier
in
2009. |
75 Percent of
Borrowers
Potentially Fall
Under the Plan
The plan, part
of the
Foreclosure
Alternatives
Program,
potentially
could apply to
75 percent of
all mortgages in
the U.S. Loans
held by Fannie
Mae and Freddie
Mac, which back
about half of
all mortgages,
currently do not
fall under the
guidelines.
However, both
organizations
are working with
the Treasury
Department to
finalize
applicable
servicing
guides.
Incentives to
Borrowers
Under the plan,
borrowers who
complete a Short
Sale are
released from
all mortgage
debt.
Additionally,
they receive
$1,500 for
moving expenses.
Incentives for
Lenders
The plan
provides for
payments of
$1,000 to
mortgage
servicers and
investors for
completing a
Short Sale - or
a deed-in-lieu
transaction, in
which the deed
is simply turned
over to the
lender.
Standardized
Documentation
The program will
publish
streamlined and
standardized
documentation
for Short Sales,
including a
Short Sale
Agreement and
Offer Acceptance
Letter. Creating
one standard set
of documents
will minimize
the complexity
of Short Sales,
which should
significantly
increase use of
the optionn.
Payments Capped
to Subordinate
Lien-Holders
Some holders of
second mortgages
have blocked
Short Sales by
seeking steep
payment in
exchange for
releasing their
claim. Under the
plan,
subordinate
lien-holders as
a group can
receive no more
than $3,000 from
proceeds of the
sale.
Time Limits for
Short Sales
Lenders will
have only 10
days to approve
or reject a
Short Sale - a
significant
step, since the
process often
takes so long to
complete that
the transaction
falls through.
Borrowers will
be allowed at
least 90 days to
market and sell
their home, with
the possibility
of additional
time based on
local market
conditions.
Marketing can
run at the same
time as the
foreclosure
process, but no
foreclosure can
take place
during the
marketing period
as long as the
borrower is
acting in good
faith to sell
the property.
RE/MAX has been
training its
agents to help
homeowners avoid
foreclosure by
offering courses
on Short Sales.
More than 8,300
RE/MAX
Affiliates hold
the Certified
Distressed
Properties
Expert
designation – 58
percent of the
total U.S. CDPE-holders.
Many other
RE/MAX
Associates have
extensive
experience with
foreclosures and
pre-foreclosures.
If you've fallen
behind in your
mortgage
payments or
received a
pre-foreclosure
letter from your
lender, a RE/MAX
Associate can
help.
Find a RE/MAX
agent
to help with a
Short Sale or
pre-foreclosure.
Under
Designations,
select
"Certified
Distressed
Property Expert
(CDPE)," Five
Star
Professional (FSP)
or "Short Sales
and Foreclosures
Resource (FSR)."
Or, under
Residential
Sub-Specialties,
select "Short
Sales" or
"Foreclosure
Property."
Get more details
at
MakingHomeAffordable.gov.
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