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Short sales: Playing by the new rules

In arm, Distressed Sales, First-Time Buyer, forclosure, foreclosure, HAFA, HAMP, Home Buyer, home sellers, lenders, loan reset, mediation, miami, miami beach, modification, mortgage, option-arm, real estate, Sellers, Short Sales, Tax Matters, Treasury on December 8, 2009 at 5:01 pm

WASHINGTON – Dec. 8, 2009 – The U.S. Treasury hopes to speed transactions under its new short sale rules, but details count, and Realtors should understand the process if they hope to avoid delays. While the new rules become effective no later than April 5, 2010, lenders have been encouraged to make them official as soon as possible.

The new rules, released Nov. 30, 2009, as the Home Affordable Foreclosure Alternatives Program (HAFA), provide financial incentives to spark short sale or deed-in-lieu (DIL) closings. The change was made to grease the wheels of a short sale transaction, giving potential buyers a shorter wait time from contract signing to lender approval of the contract. It also should make a short sale more attractive to buyers by reducing the number of problems.

The rules do not necessarily simplify the amount or complexity of short sale paperwork, however. The oversight doc, Supplemental Directive 09-09, devotes four pages out of 43 to the new short sale requirements. Real estate professionals working with short sales should review the Short Sale section of the Supplemental Directive (pages 5-9) and review the forms and letters in Exhibits A and B.

Supplemental Direction 09-09: https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf

Reprinted by Permission: © 2009 Florida Realtors®

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