Treasury sets guidelines on “Short Sales”
On Monday November 30, 2009, the U.S. Treasure set guidelines on a plan for mortgage companies to speed up “Short Sales” and other loan modification alternatives. These new guidelines will become effective on April 5, 2010
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales. The new guidelines address problems such as setting limits on the time it takes a bank to approve an offer, freeing borrows from debt and capping claims of subordinate lenders.
The guidelines also include financial incentives for completing short sales or deed-in-lieu transactions. These incentives include a $1,000 payment to services, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders. Borrowers would also receive $1,500 in relocation expenses. The guidance also caps the aggregate proceeds to subordinate lien holders at $3,000. However, second lien holders may proceed with a short sale outside of the Treasury’s program if they felt the cap was to low.
Other requirement of the program is that the mortgage services are to approve the short sale terms, including a minimum listing price before the home is even put on the market.
The following must be met in order to qualify under the new guidelines:
- The property must be the homeowner’s principle residence.
- The homeowner is delinquent on the mortgage or default looks likely.
- The loan was made prior to Jan 1, 2009 and is less than $729,650
- The borrowers’ total monthly mortgage payment exceeds 31% of their gross income.
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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