Earlier this week the U.S. Treasury Department announced new guidelines to the short sale process in hopes of speeding up the recovery of the housing market. A Short Sale occurs when a lender accepts the sale of a home at a price below the actual amount owed, short sales have become a growing part of the real estate business as troubled homeowners seek out alternatives to foreclosure.

Under the Making Home Affordable program, this new plan will aim to assist struggling homeowners by offering easier aid and financial compensation. Government officials in Washington D.C. believe these new reforms will help many families avoid the trauma of foreclosure and help the housing market stay on the road to recovery. The Stewart Team has completed many “short sales this year. we feel they are critical as more and more people continue to face foreclosure, it is and option that many homeowners are not even aware of! Through these reforms, the short sale process will be enhanced. One example of these reforms…Mortgage servicers will have 10 days to accept or reject a short sale request (takes upwards of 90 days now), and after the transaction is complete, it is possible that the borrower could be completely released from debt. Financial incentives will be provided to borrowers selling their home through a short sale and to mortgage-servicing companies completing short sale transactions.  Through this enhanced process, short sale transactions are projected to dramatically increase, resulting in less vacant and vandalized properties around the nation.

The Stewart Team can help you through this Short Sale Process, The CDPE “Certified Distressed Propery Expert designation is held by Jeff Morris on the team. He has completed specialized training and certification to assist home sellers that are considering a short sale. Give us a call or email today to set up and appointment!

To qualify under the new guidelines:

_The property must be the homeowner’s principal residence.

_The homeowner is delinquent on the mortgage or default looks likely.

_The loan was made before Jan. 1 this year and is less than $729,750

_The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income

The new guidelines enhance the short sale process in several ways:

-Speeds up the process – Mortgage servicers have 10 days to say yes or no to a short sale request, and after the transaction is complete, the borrower could be completely released from debt.
-Provides financial incentives – Borrowers are eligible to receive a $1,500 moving allowance if they sell their home through a short sale, and mortgage-servicing companies will in turn receive $1,000 for every completed short sale transaction.
-Limits proceeds to second lien holders – Second mortgage holders can only receive up to $3,000 of the sales proceeds to release their liens and investors who hold the first mortgages can collect up to $1,000 for allowing such payoffs.