Dec. 16, 2009

New Short Sale Real Estate Guidelines – We’re Saved!

Fire

Kinda Makes Me Want To Pull The Fire Alarm

A buyer recently asked me if there is anything that I can do to speed up the short sale process. Why funny that they asked on the heels of the shiny, new and improved rules that that have just been formed to streamline the short sale quick sand we’ve all been mired in for years.

I would imagine that there should be an asterisk on that word “streamline”. Anything that has to do with government or banks generally has nothing that to do with speed or efficiency. That would explain why the new plan does not go into effect until April 5, 2010. Of course, loan servicers and lenders may implement the program before then if they wanted to. They’d have to want to, so in the mean time we have to wait until April for the streamlining to begin.

If you’re an under water home owner and you’ve managed to hang in there long enough for the “reform” to occur, you only have to wait four more months for relief. Just in time for Christmas! No charge for the sarcasm.

Some of the new guidelines are almost basic enough to actually make sense. The homeowner or borrow will actually be able to receive the pre-approved short sales terms before listing the property, including the minimum acceptable net proceeds.

I’m not sure if that means that there will be a broker price opinion or an appraisal that determines the value of the home and if that value gets carved in granite. Hopefully, the home isn’t in a declining market.

Under the new rules mortgage servicers have 10 days to approve or disapprove the request for the short sale. I’m not sure if the time frame is actually going to help or just create a mountainous pile of disapproved short sales because they don’t have the man power to process the deluge of short sales that is headed their way.

There have been a lot of short sales but I’m sure we can expect a flood when this new plan kicks off, plus all of the deals in negotiation that will probably be resubmitted to the lender or loan servicer.

In the new plan, the lenders are now going to toss in a financial incentive of $1,500 to help home sellers move out of their home and into the next investor owned home they’ll l probably be renting, since their credit is dinged.

There will also be a requirement that borrowers must be fully released from future liability for the first mortgage debt - no cash contribution, promissory note, or deficiency judgment is allowed.

The closing table shake down is history. If you didn’t know it, a lot of time there is a zinger at the end for short sale home sellers.

Ten grand is the common zing. Sure, the bank or investor will sell short, but you have to bring ten large to the table, because everyone has a spare ten thousand dollars stashed for these sorts of emergencies, or take a judgment for ten thousand dollars.

There are forty-three glorious; complex pages of guidelines that hit the ground running in April. Just remember, they’re guidelines, not law. Let the games begin.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

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