The wild west of Real Estate

The wild west of Real Estate

December 17, 2009 (Ris Media reports)

“Treasury department recently released guidelines and forms for it’s new Home Affordable Foreclosure Alternatives Program (HAFA).  Homes Affordable Modification Program (HAMP) provides incentives for a short sale (SS it’s about time)…deed-in-lieu (DIL) used to avoid foreclosure on an eligible loan.”

Terryynn -

The new guidelines are a streamline process to stem the rising tide of foreclosures.  WOW…at last.  Those of us working in short sales know that it can take 45 to 60 day or 6-12 months to get a short sale approved.  What’s the difference?  The lender, the paperwork jungle required and then lost and updated and lost and updated… I personally have a short sale going on 7 months and it does look like it might close before the end of the month…whew…I’ll let you know on that one.  I’m not counting on anything until I see the deed and keys.

BUT it looks like serious efforts are going to be made to put a badly needed system to the process.  It will allow a pre-short sale approval!!! YES!!!  Most lenders just say “bring us an offer and we’ll let you know”.  A recent short sale I have had listed since August,  immediately had two offers that walked away tired of waiting for the cumbersome process.  Today we have another offer, much lower than the first two that it would have benefited the lender by $20,000 over the current offer.  We’ll see how long before I can get an answer. 

Another important provision requires borrowers to be fully released from future liability for the first mortgage debt.  That is a big deal as some of the lenders are still trying to play both sides in their negotiation.

Financial incentives will help.  $1500 for borrower relocation assistance; $1000 for servicers to cover processing; and up to $1000 for investors for allowing a total of $3000 in short sale proceeds to be distributed to the subordinate lien holders.  I wonder the affect, will the second lenders now up their requirement to sign off on the short sale?  We’ll have to wait and see.

All in all, regulation is needed, hopefully this new beaurcracy will assist and give relief at last that realtors know has been missing.  It’s basically been the wild west of real estate and we need John Wayne to come and rescue us.  Will this be it?  Hopefully so.