The Treasury Department’s plan for short Sales
In an effort to reduce paperwork and shorten the short sale process, Mortgage companies will have to approve terms and minimum listing price before the property goes on the market. The Government is providing the guide lines, strict deadlines and specific documents for the short sale process, and mortgage companies will receive $1,000 to cover administrative costs.
To qualify for the new guidelines:
*The property must be a primary residence.
*The owner is delinquent or is likely to default
*The loan is for less than $729,705 and was made before January 1st of 2009.
*The borrowers total monthly mortgage payment exceeds 31% of their before tax income.
The Government feels the plan will streamline the process between mortgage holder, buyer seller and real estate agent. Some of the short falls the Government hasn’t taken in to account are, the Mortgage Companies don’t have to put this program in place until April 5 2010. The program is voluntary for the second mortgage holders (who will be given up to $3,000 to release their claims) but who in near 50% of all short sales are holding seconds or home equity loans on these troubled properties. And of course Government programs look great on paper but how do you require uniform compliance?
Uniform Hardship and financial documents will make it easier on the industry, but whom and how quickly will mortgage companies voluntarily comply with the Governments wish list is anyone’s guess?
I Pass this sign a on my way to work every day...you have to watch out for the huge lumbering creatures they are too big to miss, to slow to get out of the way and to dumb to know they are in the high speed lane.
Whenever I read “Government rules unveiled to shorten the short sale process” I naturally think more Red Tape will slow down the already slow process, Am I a cynic or are you all hoping for mortgage company compliance and closings in 30 days?