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Monthly Archives: January 2010

Pitfall of Incomplete Short Sale Packages

 One of the most common mistakes causing even greater delays than necessary in an already long, drawn out and laborious process is an incomplete Short Sale Package. There are enough things that are out of the control of Buyers, Sellers, and their Agents in a short sale transaction, without giving the lender an excuse to set aside your file and work on one of the 400 others on their desk. Most lenders will tell you the one primary thing that will create delays in the short Sale process is an incomplete package. It is imperative that homeowners who have listed their property with a realtor for a Short Sale transaction compile a complete package of all necessary documents requested by their agent in a timely manner. Getting some or most of the documents together will simply not do. There is a very good article by KELLI HART, THE ORANGE COUNTY REGISTER about this particular Pitfall in the Short Sale process.

This is one of many reasons it is imperative to work with a Listing Agent who is experienced and Specializes in the Short Sale negotiation process. It is always a good idea to check with the short sale lender to make sure you have the latest version of their required Short Sale package to be sure you are not missing anything. Some lenders will provide a list of documents they require. Others have their own forms that must be completed along with a list of documents to be provided. If the loan to be Short Sold is FHA you can find the required HUD docs on the HUD.GOV website, but the lender servicing the loan may have their list of required forms to be added.

My team requests that our Short Sale clients provide all of the required docs for the Short Sale package within a week of listing the property. We want to be sure that everything is in place so that when we receive an offer there is no delay in getting the completed package to the lender. There are numerous items we have learned along the way in the five years we have been specializing in Short sales to make sure our files get the immediate attention we desire. These will be discussed in a future post.

 

 
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Posted by on January 18, 2010 in Short Sales

 

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Short Sales Get Boost From New Obama Treasury Guidelines

As the banks are realizing they are better off with reduced losses via a Short Sale as opposed to the greater losses with a Foreclosure resulting in REO (bank owned) properties, the government is actually coming up with programs to provide incentives for them to approve Short Sales. 

In this article http://tinyurl.com/yfssm4o written by Richard D. Vetstein which I found on the Shortsaleman’s Twitter site you will find some good information and links regarding the Home Affordable Foreclosure Alternatives Program.

While it is encouraging to see the government taking steps to to incentivize lenders in this direction, the lenders will not be required to participate in the program. Making stipulations such as a maximum of 10 days for the lenders to approve a short sale would be a great improvement over the 60 – 90 days or more many of us have been experiencing in the past. However, that could be a two edged sword as lenders who are overwhelmed in their loss mitigation departments may be reluctant to sign up for participation if they fear they will not be able to comply with these type of rules, or it could lead to some files being denied simply to meet the deadline.

It will be interesting to see how it all plays out. Bringing some conformity to the process would sure be a breath of fresh air to those of us in the thick of the short sale processes as we continue to help as many distressed property owners avoid foreclosure as possible. At the very least both the lenders and government are making it very clear, they would prefer a short sale over a foreclosure resulting in more bank owned properties, and everyone in the process will be better off for it, especially the borrowers in distress.

 
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Posted by on January 1, 2010 in Short Sales

 

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