Will Short Sales Get Easier?
Posted by carolyn in Sacramento Real Estate Market on April 26th, 2010
I often recommend that short sales be avoided when looking for a home. One problem has been little standardization of the process. Banks have had no consistency in dealing with sellers and short sale offers and even finding two listing agents who process offers in the same way has also been a challenge.
Two government programs are attempting to streamline this process – HAMP (Home Affordable Modification Program) and HAFA (Home Affordable Foreclosure Alternative). The primary objective of both of these programs is to help qualified homeowners avoid foreclosure and modify their loans when possible to keep current homeowners in their homes. Get more information on both of these programs at the official government site: MakingHomeAffodable.gov
Guidelines that went into place in early April is starting to put some structure into the short sale process. Structure though does not mean simplicity as there are 45+ pages of documentation. While now there are some specific time frames for lenders who chose to participate in this program, many of the details are still left up to each individual company in how to implement the program. This means that there will still be no real consistency when working with short sales. Bank of America does not have to have the same requirements as Wells Fargo or the local credit union down the street.
While there will be some structure in the new program, it is likely that some uncertainty will remain in terms of a resolution of offers. Many buyers have voiced frustration in the amount of time that often passes before they have a resolution on their offer. Until the processing time of short sale matches other distressed properties, most buyers will still be better off avoiding short sales.
Next time – What should you look for when considering putting in an offer if your only choice is a short sale listing?
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