Finally! Home owners, Realtors, Lenders, and home buyers are all going to benefit from these new guidlines. The faster and easier the process becomes the closer offers will come to being fair market value. This will lead to reduced inventories, and market stabilization. The Treasury department created a 46 page guide for major lenders to follow with regards to short sales, deed in lieu, and loan modifications. The frustrating process was in need of standardization, and streamlining.
Short sales can take months to close, andtend to go pending with prices that are below market value since the buyer(s) brace themselves for the long drawn out process with no guarantee that their offer will be accepted. New homes, regular sales, and bank owned homes can be closed in a normal time period, and there is little uncertainity IF you are going to close. When short sales can be conducted in the same time frame, they will not have this huge disadvantage.
These guidelines go into effect in April of 2010. Hopefully, most lenders will become early adopters of the new guidelines.
One major point of the guidelines is that the lender has to offer a plan to help the borrower with a loan modification ahead of entertaining a short sale, or deed-in-lieu.
This is a great requirement, since I see many people that would rather keep their current home, but are having a tough time making the payments, or they are so far "underwater" that they question the rational of paying on a mortgage that is much higher than the actual value.
I think that one aspect that was missing was creating an incentive for the lend ers to "cram-down", or reduce the principle balance to the actual value of the home. Many borrowers would work to keep their homes if they had equity, or at least didn't have negative equity.
LINK to Home ownership retention guide https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf
If you are looking for help with a short sale or loan modification for a home located in Manatee or Sarasota Counties I would be happy to help you understand your options. I have helped dozens of homeowners either sell or assist to modify their home loans. I can help you too with no cost. For all your real estate needs I am ready to go to work for you!
Joe Murphy 941-780-3260
Joseph C Murphy P.A.