Govt making short sales easier? That’s more like it!

[NotCranky]

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Welcome to C.A.R.’s Market Matters, your weekly market response guide.

To access a version specifically for matt ed for consumers that you can print, share via e-mail, or post on your Web site, please click here.

News Flash

Obama Administration Announces Financial Incentives and Uniform Process for Short Sales

The NATIONAL ASSOCIATION OF REALTORS® (NAR) today announced that the Obama Administration has added new incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP), part of the administration’s Making Home Affordable plan.

Loan servicers may consider short sales or deeds-in-lieu of foreclosure for borrowers who do not qualify to have their loans modified on a permanent basis under the Making Home Affordable Loan Modification Program.

· Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program, but don’t qualify for a modification or do not successfully complete the three-month trial period. Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate.

· Incentives include: $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; $1,500 for borrowers/homeowners to help with relocation expenses; and up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).

· The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.

· Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.

· In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.

· The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.

· Servicers may not charge fees to borrowers/homeowners for participating in the FAP.

· The program is in effect through 2012.

· Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).

[CA renter]

So, this is how they plan to make credit scores meaningless.

For those of us who’ve never defaulted on anything, our scores mean nothing more than the FBs who overpaid, took on more debt than they could ever repay, lived rent-free, and then were relieved of hundreds of thousands of dollars worth of debt that they agreed to pay.

Nice.

BTW, could they have picked a better couple to represent the program? I’d bet big dollars that they are NOT representative of most FBs.

[CA renter]

So, this is how they plan to make credit scores meaningless.

For those of us who’ve never defaulted on anything, our scores mean nothing more than the FBs who overpaid, took on more debt than they could ever repay, lived rent-free, and then were relieved of hundreds of thousands of dollars worth of debt that they agreed to pay.

Nice.

BTW, could they have picked a better couple to represent the program? I’d bet big dollars that they are NOT representative of most FBs.

[CA renter]

So, this is how they plan to make credit scores meaningless.

For those of us who’ve never defaulted on anything, our scores mean nothing more than the FBs who overpaid, took on more debt than they could ever repay, lived rent-free, and then were relieved of hundreds of thousands of dollars worth of debt that they agreed to pay.

Nice.

BTW, could they have picked a better couple to represent the program? I’d bet big dollars that they are NOT representative of most FBs.

[CA renter]

So, this is how they plan to make credit scores meaningless.

For those of us who’ve never defaulted on anything, our scores mean nothing more than the FBs who overpaid, took on more debt than they could ever repay, lived rent-free, and then were relieved of hundreds of thousands of dollars worth of debt that they agreed to pay.

Nice.

BTW, could they have picked a better couple to represent the program? I’d bet big dollars that they are NOT representative of most FBs.

[CA renter]

So, this is how they plan to make credit scores meaningless.

For those of us who’ve never defaulted on anything, our scores mean nothing more than the FBs who overpaid, took on more debt than they could ever repay, lived rent-free, and then were relieved of hundreds of thousands of dollars worth of debt that they agreed to pay.

Nice.

BTW, could they have picked a better couple to represent the program? I’d bet big dollars that they are NOT representative of most FBs.

[ibjames]

if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?

[ibjames]

if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?

[ibjames]

if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?

[ibjames]

if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?

[ibjames]

if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?

[NotCranky]

[quote=ibjames]if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?[/quote]

Hopefully, you are right that they will become easier. Hopefully, inventory will also swell and the shortsale inventory be of better quality.

I think the emphasis on not damaging credit points out the need,for “housing recovery” for these shortsellers to be future buyers at reset prices. Maybe two upside down neighbors can just shortsale to each other.(sarcasm)

It makes sense that short sales would have their day in this “crisis”. Short sales make sense on many levels to a community(less abandoned houses) and eventually in a mass default siuation to lenders. In a time of less defaults lenders don’t want to be seen as offer “easy solutions”( I have read that anyway).

It looks like some small changes may trickle in at the transaction level. I think if they become less of a nightmare there are some benefits to average buyers over REO’s(on a case by case basis). Namely property condition (on average) and TDS and compliance issues.

[NotCranky]

[quote=ibjames]if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?[/quote]

Hopefully, you are right that they will become easier. Hopefully, inventory will also swell and the shortsale inventory be of better quality.

I think the emphasis on not damaging credit points out the need,for “housing recovery” for these shortsellers to be future buyers at reset prices. Maybe two upside down neighbors can just shortsale to each other.(sarcasm)

It makes sense that short sales would have their day in this “crisis”. Short sales make sense on many levels to a community(less abandoned houses) and eventually in a mass default siuation to lenders. In a time of less defaults lenders don’t want to be seen as offer “easy solutions”( I have read that anyway).

It looks like some small changes may trickle in at the transaction level. I think if they become less of a nightmare there are some benefits to average buyers over REO’s(on a case by case basis). Namely property condition (on average) and TDS and compliance issues.

[NotCranky]

[quote=ibjames]if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?[/quote]

Hopefully, you are right that they will become easier. Hopefully, inventory will also swell and the shortsale inventory be of better quality.

I think the emphasis on not damaging credit points out the need,for “housing recovery” for these shortsellers to be future buyers at reset prices. Maybe two upside down neighbors can just shortsale to each other.(sarcasm)

It makes sense that short sales would have their day in this “crisis”. Short sales make sense on many levels to a community(less abandoned houses) and eventually in a mass default siuation to lenders. In a time of less defaults lenders don’t want to be seen as offer “easy solutions”( I have read that anyway).

It looks like some small changes may trickle in at the transaction level. I think if they become less of a nightmare there are some benefits to average buyers over REO’s(on a case by case basis). Namely property condition (on average) and TDS and compliance issues.

[NotCranky]

[quote=ibjames]if you read the comments to that article, most of them are based on that the lady had cancer, or why are they trying to get people that have lost jobs out of their house so fast, etc.. when that is not the majority of FBs out there right now you would think..

Russ, so basically, under what you posted, short sales really haven’t changed then other than not damaging credit?[/quote]

Hopefully, you are right that they will become easier. Hopefully, inventory will also swell and the shortsale inventory be of better quality.

I think the emphasis on not damaging credit points out the need,for “housing recovery” for these shortsellers to be future buyers at reset prices. Maybe two upside down neighbors can just shortsale to each other.(sarcasm)

It makes sense that short sales would have their day in this “crisis”. Short sales make sense on many levels to a community(less abandoned houses) and eventually in a mass default siuation to lenders. In a time of less defaults lenders don’t want to be seen as offer “easy solutions”( I have read that anyway).

It looks like some small changes may trickle in at the transaction level. I think if they become less of a nightmare there are some benefits to average buyers over REO’s(on a case by case basis). Namely property condition (on average) and TDS and compliance issues.

[Author]

Posts