The Treasury Department under Obama’s Home Affordable Modification Program (HAMP) has recently adopted sweeping rules to speed up short sales. Some of the changes include: (1) pre-approval of short sale terms by the lender prior to the property being listed, (2) prohibits reduction in the real estate commission, (3) requires the borrower to be released from liability for any deficiency, (4) standardizing of process, documents and timeframes and (5) provides financial incentives to borrows, lenders and investors.
Sounds too good to be true, well it is. There are some “short” comings: (1) new rules do not have to be used by lenders until April 5, 2010, (2) program is voluntary for second mortgages, (3) program appears to only apply to HAMP eligible loans, (4) property must be borrower’s principal residence and (5) borrower’s monthly mortgage payment must exceed 31% of gross income.
At least this is a “first” step in the right direction. It would be great if these new rules speed up the process and allow for early preapproval of a short sale price!! I’ll keep looking for more information; please let me know if you find out anything new as well.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.