Monday, April 12, 2010

New Short Sale Rules

My client and I have been waiting over a month now to receive a response from the bank on an offer we submitted for a condo in Glendale. Luckily my client was already aware of how long the short sale process can take because I had informed him before submitting the offer. Every week I follow up with the listing agent to see if he has received a response from the bank with a decision, but the agent always come back with "we should be hearing from the bank next week." Pretty soon it will be 2 months since we originally submitted our offer. There is nothing "short" about a short sale. The following new short sale rules went into effect April 5, 2010, and are intended to make short sales a much faster process, and certainly much easier.

-Sellers must be unqualified for a loan modification under the Home Affordable Mortgage Program or be unable to afford the modification
-The bank will set an acceptable value of the home upfront, based on an appraisal or broker's price opinion
-Lenders must approve or deny a purchase offer within 10 days of it being submitted
-Once the bank approves a home for short sale, sellers may stop paying all related mortgage payments, and unpaid mortgage debt will be forgiven
-These mortgage payments will not be shown as late on credit reports
-At closing, sellers are entitled to as much as $1,500 from the government to cover relocation expenses

Stay tuned for a future post to find out if our offer was accepted.

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