steve's White Mountain Blog

head_left_image

Rules to speed up short sales...unveiled by the Treasury department

 

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?

 

                       

                                                                                                                                                                              Your-White Mountain New Hampshire real Estate Expert

                    steve@alpinelakes.com toll free 800-926-5653 /cell 603-381-7898

                        MLS search and Realtor web site: www.alpinelakes.com

                         My outside Blog: www.steveswhitemountainblog.com

                    Lincoln NH &  Local interest site: www.localism.com/nh/lincoln

    Grafton County NH MLS search

Comment balloon 19 commentsSteve Loynd • December 08 2009 01:16PM

Comments

It will be interesting for sure.  I do think that something needs to be done to streamline things, but not sure if this is the right solution.

Posted by Courtney Cooper, 206-850-8841 (Ben Kinney Brokerages Leadership at our Keller Williams North Seattle Office) about 10 years ago

Courtney, Do I sound suspicious?, I guess that is in my Nature...don't get me wrong if this works I'm all for it. But it is an attempt by the Government to control private industry and we have seen what happens when those programs are implemented.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Time will tell but I remain cyncial as well.  It would be a pleasant surprise !

Posted by The Somers Team, Delivering Real Estate Happiness (The Somers Team at KW Philadelphia) about 10 years ago

Hi Steve,

These new guidelines also offer incentives to both homeowners and their Lenders for working out a short sale. Hopefully this will help out the owners and provide more incentive for banks to get things done!

Posted by Christine Hynes, Orange County Senior Loan Consultant (American Capital Corporation) about 10 years ago

Steve, Claude always says the dumb ones are the ones that get hit, and because they are dumb, they deserve it...I think his theory would fail with a moose?!! Don't you? The dumb one is the one who hits the moose.

On another note, yes, unilateral compliance would be wonderful! And $3,000 in the pocket vs. a total loss, is better than nothing (for the second note holders).

Posted by Jane Cross (Homes By Cross serving Charlotte NC Real Estate Needs) about 10 years ago

Christopher & Stephanie...It is the season of giving..who knows, could be a good thing?

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Christine, I read the guidelines and saw there was a provision allowing the seller a $1,500 moving expense, and the $/grand bonus at closing for the lender. Wait and see if the monthly fee collected by the service companies will be worth closing Vs... dragging out the deals for more months.  I know cynical right?

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Jane, that would be the appeal for the second mortgage holder ..lose everything in a foreclosure or sign off for $3,000...but what if the second was $150,000...Will they take $3,000?

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Voluntary compliance.  What a waste of breathe and paper!  Leave it to the government to make us think they are doing something!

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) about 10 years ago

I don't see it actually being effective.  Government is about making a sound bite and then moving on to "solve" another issue. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) about 10 years ago

I like the fact we can get started before the buyer is in place but you're right how soon will the lenders get on board?

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) about 10 years ago

Lane, The next move is to hand out pacifiers and sympathy cards...maybe we'll think they did something?

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Wow... No vaseline?  Might have less of a need for the pacifier then. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) about 10 years ago

Steve ~ I agree with you, does the government really know what they are getting into here with these short sales. Sure, they have heard the complaints but do they really understand the process? I fear this will end up slowing the short sale process as well. I am not looking forward to seeing how "it all turns out."

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) about 10 years ago

Steve.. When you have been in the real estate business for years, you do (unfortunately) become a cynic...seems to go with the territory.  There are so many times the government makes promises they DON'T keep.  LOL.  Now that I'm thinking about this... it isn't just in real estate matters.. the government does this straight across the board.

valerie osterhoudt

Posted by Valerie Osterhoudt, ABR, Cromwell, CT Real Estate ~ 860.883.8889 (Johnson Real Estate, Inc.) about 10 years ago

Steve... Forgot to mention above.  I like the *moose* sign.  I can't imagine how one could NOT see those creatures.  THEY ARE HUGE!  If I were to hit a moose... God forbid, my van would be totalled and the moose would probably just walk away.

valerie osterhoudt

Posted by Valerie Osterhoudt, ABR, Cromwell, CT Real Estate ~ 860.883.8889 (Johnson Real Estate, Inc.) about 10 years ago

Terrie...The other analogy I can offer here is once you get a tanker moving it is nearly impossible to make quick turns or big it to a halt. The Government getting involved will end any flexibility to fine tune a deal.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Steve, I have thought this out thoroughly. If it's $150K...you're f#%##d. In the end...it ends up being quite simple.

Posted by Jane Cross (Homes By Cross serving Charlotte NC Real Estate Needs) about 10 years ago

Jane...You said it!! the only way to recover is if the second foreclosed, and bought out the first mortgage,Then you better hope there is enough equity to be worth going that way.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Participate