Bank of America recently held a webinar to highlight current short sale issues in today's market. The webinar summarized that lenders and investors really prefer a short sale over a foreclosure, despite lengthy processing times and various hurdles during the transaction. The webinar highlighted the following:
1. Short sale lenders and investors are granting relocation assistance up to $3K for participants of various short sale programs. A current utility bill must be furnished as proof of residency.
2. The waiver of deficiency is based on several factors: the state the property is located in, mortgage insurance (if applicable), investor guidelines, and which program the borrower qualifies under (i.e. HAFA, COOP, etc).
3. Document collection: Participants of past and current short sale transactions confirm the submission of documents is quite tedious. Be certain that all blanks are filled in and all signatures (it is best to err on the side of caution and obtain "wet" or "hard" signatures for the short sale process) are complete with dates so that short sale lenders and investors will have no reason to "reject" any documents.
The moderator said it best, "If there's one theme here, it's that no two transactions are the same". In our experience, we couldn't agree more. Be prepared and hang in there -- Lenders and investors are trying to expedite short sale transactions to close by end of 2012. This will allow their sellers to take advantage of the guaranteed benefit currently offered by the Debt Forgiveness Act (if applicable). See last week's tip (Tip 43-2012) for information on the Debt Forgiveness Act as well.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.