Realtors and Economists alike, predict that 2010 may herald the top of the short sale market. That’s one reason why I am happy to see that the Obama Administration realeased guidelines to become rules in April providing incentives for loan servicers and homeowners to engage in short sales when borrowers don’t qualify for a loan modification.
The most salient guidelines allow borrowers to receive pre-approved short term sales prior to property listing; release borrowers from future liability if the sale goes through, and finally, require that loan servicers respond to offers within 10 days of seller approval. In addition, they prohibit the reduction of real estate brokerage commissions stated in listing agreements (a practice that’s been a sore point with many real estate agents).
Although the new guidelines also offer some monetary incentives to borrowers, servicers and second lien holders of up to $6,500 in total, there are still too many obstacles, in my view, to substantially speed up the process. Among the most difficult obstacles is the lack of organization within the lender/investor ranks to help create a unified process through which to move short sale offers. And in the coming months as short sales increase, approval times will most likely bog down.
Is there an assembly line expert in the house?