us_treasury_deptThe 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.


One response

  1. 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.

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