Short Sale Federal Program To Start April 5th, 2010
For those of you that do not know, the Obama administration is trying to encourage home owners to take the short sale route to avoid foreclosure.
In short, (no pun intended :)) a short sale is when you have to sell your home for less than what you owe on your mortgage. It's also better on your credit than a foreclosure. As of now, it will take 3 to 5 years before you can get a mortgage. With a foreclosure, you are looking at, at least 10 years or more before you can get another mortgage.
This new short sale program is also to curtail fraud among the mortgage banking system.
Beginning April 5th, lenders will have to consult with real estate practicioners to assess home values and a minimum acceptable offer. Then they must accept any offer that is equal to or higher than the assessed home value. Right now, banks will not divulge the minimum they will take until an offer on the home is presented. If the bank feels the offer is too low, then they will negotiate to try to get a higher price.
The program will also offer a cash payment to the home owner, as well as to the servicer and a second lien-holder, and will protect future lender lawsuits for the unpaid mortgage balance.
Over the next 6 months or so, we'll see how it goes. It's going to be interesting for sure!
NYS Licensed Real Estate Agent
Cell: (631) 703-0201
Office: (631) 226-5995 Ext. 242
Email: JackieC@century21aa.com
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I have not seen this do you have a refrence for this info? please let me know at ken.rosengren@comcast.net
It has to be better than the system that's currently in place. I have a short sale offer written that I've been waiting 3 months for an answer on!
I know the process, but if banks have agreed to a short sale condition, know they're going to lose money on the sale, how many rocket scientists does it take to decide how much they want to lose and when they want to lose it?
Does it really take 3 months or longer to make that decision?
Hi Craig, Holy Craig that is way too long! And no, it shouldn't take any longer than a regular resale. Banks are sometimes not smart. It costs them so much more to do a foreclosure than a short sale. I think they try to hold out for that golden cash offer at top dollar. Ha, not going to happen.
I have a short sale that is not approved since 12/23/09 because bank #2 wants 5k more than bank #1 wants to give and it's an all CASH offer at the asking price.This house could end up going to foreclosure all because bank #2 is stubborn as a mule. Then they won't get a dime. The homeowner's credit will really be ruined and that will be ok with the bank. Sounds more like revenge to me.
And if these banks were rocket scientists Craig, our deals would go through faster.
Jackie, I didn't know any of that and this information comes at a good time to advise someone on what they should do with a short sale they've waited a long time for. I hope I can send her your post....
Jackie - I'm in agreement with Craig. I did one short sale with a cash buyer. The seller's agent was holding a letter stating they would accept $ 300,000. They first buyer walked. My buyer was second. She agreed to pay the $ 300,000 cash. We did the inspections and found an illegal room, so she asked for money off. After two months, B of A came back and wanted $ 15,000 more! She walked too! What was the sense of this?
Hi Jackie:
This is the first I'm hearing about this...
You're right...it's going to be a "wait and see".
Hi Carole, I actually thought this program was on the back burner since I wasn't hearing anything about it until yesterday. I hope it will help your friend.
Hi Elyse, Because banks are trying to get as much as possible for these homes. I really hope this new program will work. It will certainly make our lives easier. Or at least I hope it does. It's going to be a wait and see game.
Hi Toula, Wait and see is right. I tried doing research as to what would happen if these banks don't comply. I haven't found anything about that............YET. I'm still working on it.
Jackie I represent a New York Investment Fund and we buy short sales cash. Give me a call with your listing at 631-523-1411. We can work out a win win win for all.