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US Treasury Steps in to Support Short Sales

Alright Ladies and Gentlemen!  It is okay to swallow your pride and reach out to a real estate professional in regards to your upside down mortgage.  We all realize the troubling times and the interest only ARM loans that you got 5 years ago.  There is no shame and no one is going to point fingers.  The US Treasury feels your pain and wants to cooperate when it comes to Short Sales.  Those of you that can no longer afford your mortgage should be jumping for joy.

They plan to streamline the short sale process and here is a recap of the changes:

  • Must be the homeowner’s principal residence
  • The mortgage must be less than $729,750
  • Homeowner is delinquent on the the mortgage or “default looks likely”
  • Homeowners mortgage payment exceeds 31% DTI based on gross income
  • The Loan must have closed before January 1st, 2009.

The “default looks likely” is going to raise a lot of speculation because of it’s ambiguous definition.  Most of the banks won’t even talk to a troubled borrower until they have missed at least one payment.  I can see this being revisited in the near future.  It gives those borrowers who owe more than what their home is worth but still can afford their payments, a way out without that big of a penalty.

Changes Enacted:

  • $1,000 to lenders
  • $1,500 to sellers for closing costs or moving expenses
  • Up to $3,000 to junior lien holders for release of their lein
  • A minimum of 90 days and up to 1 year to market and sell the property
  • No foreclosure may commence during the marketing period allowed above
  • Servicers may not lower agent commissions after an offer is received
  • Standardized paperwork
  • Servicers may not change borrowers fees to particpate
  • the Short Sale Must Fully Discharge the borrower!!!!!!!

This is wonderful news for those troubled borrowers.  All the terms are laid out cut and dry.  Defined marketing time, no risk of going to foreclosure, prevents reduction in Realtor commissions, shortens time frames, fully discharges borrowers, and allegedly allows for submission of short sale prior to defaulting on mortgage.

You can contact me at for a confidential consultation if you think a Short Sale is your solution.

Also read this...

  • You made some good points there. I did a search on the topic and found most people will agree with your blog.

  • You made some good points there. I did a search on the topic and found most people will agree with your blog.

  • Some help the short sales!

  • Some help the short sales!

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