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January 2010
Relief in sight for short sales?
The federal government is finally setting guidelines for how banks deal with short sales of homes. As any Realtor® knows, the term "short sale" makes everyone groan as we know the reality of having to deal with banks that take too long to determine whether an offer is acceptable and deal with potential buyers who walk away frustrated with the current system.
A short sale--when a house is sold for less than what is owed on the mortgage with the blessing of the lender--is a way for homeowners to get out from a mortgage they can no longer afford. Often the process can take months and a lot of patience for all involved. The new guidelines address the frustrations:
1. Banks must respond within 10 business days to a short sale offer.
2. Sellers will not have to repay any debt and will be eligible for $1,500 in moving expenses.
3. Lenders will get administrative and processing costs refunded.
The new guidelines are suppose to be implemented by lenders no later than April 2010; however, these guidelines don't necessarily apply to Fannie Mae or Freddie Mac loans, according to floridarealtors.org.
The guidelines come with some teeth as the U.S. Treasury is expected to give harsh penalities to lenders that don't comply. Let's hope these new guidelines will help all involved get through the short sale process more efficiently!
To review a copy of the new guidelines, click here.
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