The U.S. Treasury Department released a plan intended to speed up and encourage the short sale process.
A short sale is the final step a homeowner may take before giving up on a house and letting it slide into foreclosure. However, in the past the foreclosure process has been time consuming and has not delivered the desired results. Currently 3 out of 4 houses that start the short sale process end up failing and falling into foreclosure. If the process does close it takes on average 8 months before the transaction is complete, this makes if frustrating not only for the seller but for the buyer as well.
The new plan A lender must give a yes or a no answer to an offer within 10 days. It will also offer incentives to sellers buyers and lenders to complete the transaction. The incentives include:
- Borrowers would receive $1,500 from the government in relocation expenses.
- Servicers receive $1,000 from the government per transaction.
- Second liens holders can receive up to $3,000 of the sales proceeds for releasing their liens.
- First lien investors can receive $1,000 from the government for signing off on payments to subordinate lien holders.
- Borrowers must be fully released from any further liability.
More information will be released shortly.
If you have any questions on the new program please contact Remax Alliance.
I think it’s so great that lenders are required to give down and out homeowners some cash after they sell their house through a short sale. I like the idea because the owners usually don’t have any cash and can use all of the help they can get.