Monday, The US Treasury announced new guidance to simplify the short sale process. These new guidelines to speed up short sale approvals, prohibit the reduction of real estate commissions, and set new limits for second lien holders, have long been awaited by everyone involved in a short sale transaction.
Whether or not we will be able to get short sales approved here in Atlanta in 10 days or less is still unknown. We’ve had some approved quickly, but none that quick. We only hope that the new pressure “incentive”on lenders to “hurry it up” and stem new foreclosures in Georgia will not be met with quick denials because of the lack of time to quickly analyze the short sale file.
Shorted Lenders and Servicing Companies
The new short sale guidance offers servicing companies a $1000 payment and investors up to $1000 to sign off on payments to subordinate lien holders. Second mortgage holders have been demanding, in recent months, more money than the primary mortgage holder have allowed them to be paid. Many times, this dispute holds up the closing of a transaction, but the new guidance caps the subordinate lenders proceeds to $3000 which should eliminate the bickering. Should…
Atlanta Short Sale Sellers
Until now, most sellers have not been allowed to receive any funds in a short sale transaction, but the new guidance will allow for borrowers to receive up to $1500 in moving expenses at closing.
Short Sale Real Estate Agents
Many agents have avoided short sales because many servicing companies would demand to reduce the real estate commission paid to agents involved. New guidelines prohibit lenders from reducing real estate agent commissions.
While this guidance from the Treasury is promising, we shall see how lenders and servicing companies respond in the coming months.
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Short sales are a good way to save some money if you are facing foreclosure. I would use both of these measures as a last resort though as neither is great for your credit.
We always tell people it’s a last resort, but most families we talk to about a short sale here in Atlanta have already tried everything else and their credit is already destroyed.