Last Update on the Proposed Short Sale Changes

Two last notes from the proposed changes to the short sale process:

1) The program doesn’t take effect until April 5, though servicers may implement it before then it they meet certain requirements (what they are, I haven’t seen.)

2) The program is an opt-in … and that causes a little concern as I wonder if there’s enough incentive for lenders to participate.

All the statistics indicate homes sell for more money as short sales than as REOs … it’s not even close. Yet the lenders continue to opt for the foreclosures while leaving everyone twisting in the wind on short sales. Logic isn’t their collective strong suit.

Incidentally, this whole program doesn’t apply for loans guaranteed by Fannie Mae or Freddie Mac … that’s about half the loans outstanding in America. Those are going to continue on the current program, which can be measured only by a perpetual calendar.

[tags]Phoenix real estate[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

8 Comments

  • Mark A. 8 years ago

    My theory on REO’s is that many loss mitigators are so swamped with incomplete/inadequate short sale packages that they just ignore those files. Meanwhile the foreclosure clock is ticking on those, and before you know it, it’s too late. Turnover in LM is super high. I don’t know if it’s about logic. It’s probably about lack of man/womanpower on the lenders’ part, and subpar distressed property knowledge/experience on the part of many listing agents. Simply not enough short sales are making it through the pipeline that would have otherwise had a chance.

  • Jonathan Dalton 8 years ago

    I only disagree in as much as there are a lot of completed files that go ignored as well, and that makes no sense at all.

    One of the interesting sidelights of a short sale which a lot of agents don’t realize, and which you alluded to, is when there’s something missing from the file the negotiator isn’t proactively calling out but is waiting for the agent to call in for their weekly check-in as the lenders usually request.

  • Mark A. 8 years ago

    And I can’t blame the negotiator for it. He/she is only a gatekeeper that is looking for any excuse for not having to pass on the package to the investor. Sometimes, I even wonder whether there’s a monetary incentive for the negotiator to pass along as few files to the investor, as possible.

  • Twitter Trackbacks for Last Update on the Proposed Short Sale Changes | Phoenix Real Estate | Phoenix Homes for Sale | All Phoenix [allphoenixrealestate.com] on Topsy.com 8 years ago

    […] Last Update on the Proposed Short Sale Changes | Phoenix Real Estate | Phoenix Homes for Sale | All … http://www.allphoenixrealestate.com/12012009/last-update-on-the-proposed-short-sale-changes – view page – cached Two last notes from the proposed changes to the short sale process: 1) The program doesn’t take effect until April 5, though servicers may implement it before then it they meet certain requirements… Read moreTwo last notes from the proposed changes to the short sale process: 1) The program doesn’t take effect until April 5, though servicers may implement it before then it they meet certain requirements (what they are, I haven’t seen.) 2) The program is an opt-in …, Two last notes from the proposed changes to the short sale process: 1) The program doesn’t take effect until April 5, though servicers may implement it View page […]

  • Kyle 8 years ago

    Isn’t this whole program pretty irrelevant to people in AZ? You have to qualify for the Making Home Affordable program first, which states your home can’t have more than a 125% LTV on the mortgage balance. In markets where prices are the most depressed like ours, a huge number of people are way over the 125% ratio, so in my view this does little to help the areas where people need it the most.

    Not that i have a better plan, just don’t want people gettting their hopes up too high.

  • Jonathan Dalton 8 years ago

    Wow, Kyle … good catch. I’ve been reading everything as it comes through and didn’t see this line until now from the Treasury itself::

    “A loan must be HAMP eligible and meet the other requirements stated
    herein to be eligible for incentive compensation under HAFA.”

    If I’m reading this right, you’re absolutely correct.

  • Kyle 8 years ago

    For the first time I went to the source rather than listen to the broker and media propaganda i usually get. I had no idea what HAMP meant so that’s what caught my eye. I’m sure that we’ll start seeing people complain about 6 monthsfrom now when the program really takes effect (or non-effect for us)

  • Jonathan Dalton 8 years ago

    Kyle – I think we’re mixing up acronyms. HARP is the refinance plan which requires the 125% LTV. HAMP is the modification plan and there isn’t an LTV requirement I can find anywhere.

    So, if that’s the case, this plan will help here in Phoenix. Are you seeing anything different on HAMP?

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