Short sales brightening up
Today, the U.S. Treasury Department released their highly anticipated guidance on a plan for mortgage companies to expedite short sales as well as demanded mortgage servicers make loan modifications permanent rather than continue to shuffle distressed homeowners out the door.
Coldwell Banker Realtor, Maya Paveza said that the changes will “be wonderful in helping Buyers have more options, and agents to get compensated for their work. Short sales have degraded so much in the last three years, and some Lenders hold the position they would rather wait for a foreclosure and a market recovery.”
The new guidance plan comes with huge news for Realtors- mortgage servicing companies may no longer reduce real estate commissions on the sale which will likely lead to more agents jumping on to the short sale bandwagon.
The new guidelines set limits on the time it takes a bank to approve an offer which is a massive shift in the entire short sale landscape. The new rules also “caps the aggregate proceeds to subordinate lien holders at $3,000″ and require the borrower be released in full from future liabilities.
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I didn’t see any link back to the details on these guidelines. Any idea on where I can find out more about them? I don’t see how any of the stuff mentioned can be regulated, fwiw.
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Despite the emergency status of statements made, the guidelines have not been published in full, this is all based on statements by Obama and the Treasury Department. Will be interesting to see how they plan on wrangling something so big. Will their involvement be a good or a bad thing, what do you think?
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Bad thing. They can not force banks to work like that. They can try, but it will never happen. The banks don’t have enough people; the Gov’t doesn’t have anybody to regulate this. It seriously just sounds like a bunch of hot air to make it sound like they are helping when they actually have no control over it.
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What does it mean that banks can no longer reduce agent commissions? As a listing agent, can I list a shortsale at 10% and the bank has to pay it? Or are they fixing commissions at 6%? 5%?
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Exactly. So we can’t fix prices and have an industry wide commission but the Gov’t can fix it for us? Sounds like it will work out well. /sarcasm
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I think the banks are being told to honor the commission offered by the listing agent and not reduce it willy nilly as a wedge on whether the bank will accept the offer on a shortsale. At least you’ll know what the agreed terms are going in by what’s in the mls, and not some secretary in the legal department.
I don’t care what language they use, the idea of pushing banks to streamline is the real news here, coupled with on site treasury officials to pinpoint bottlenecks and relieve pressure is a good thing- this should have been done 5 years ago in California- all eyes on the problems can bring better solutions for institutions with unique issues.
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I just heard through the grapevine that some of the requirements that are now public include servicers having to approve or disapprove a short sale request within 10 days and when done, the transaction must fully release the borrower. More details to come, I’m sure.
Hi Lani and Benn–can you provide some links as the source of your article? I have not heard any of this and am curious to learn more about it. All I have been hearing about is the move to pressure banks on loan mods.
Thanks!
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It looks like a link was broken, here you go Pam https://www.hmpadmin.com/portal/docs/news/hampupdate113009.pdf
This will be difficult to regulate, but it is, nevertheless, good news…at least getting us on the right track. I can’t wait to get to my RE class tonight and tell me students about this.
Thanks Lani, for keeping us informed!
tamara
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No problem, Tamara!
Thanks for reading! 
If this is true, thank the heavens!
If this is true…
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Oh it’s true, indeed. Now we’ll see if this goes anywhere or if it’s a PR move.
I look forward in helping my current clients avoid the devasting impact of foreclosure even faster through the new 10 day “answer” streamline. Bottom line for the agents who have been in the trenches for a longtime this is a just and due reward!