Gov’t Unveils New Short Sale Rules
It’s here, the much anticipated plan from the Treasury Department on how to streamline short sales was announced on Monday, November 30th. Since the Making Home Affordable program has been a miserable failure thus far, the Obama administration has turned their attention from loan modifications to short sales as a way to solve the real estate debocle in America. Here is what you need to know about the changes that have been enacted:
1. Who Qualifies: Like all Gov’t programs, there are stipulations…
- The property must be the homeowner’s principal residence.
- The homeowner is delinquent on the mortgage or default looks likely.
- The loan was made before Jan. 1 this year and is less than $729,750
- The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income
There has been a huge bandwagon-like shift to luxury short sales in the past several months. And while it is true that the “bigger the deal, the more money you can make”, this shows yet again that it is not wise to leave the under small deals aside. Our attitude is to BOTH. There is plenty of money to be made on the small deals as well as the big ones.
This also proves something we have preached for years…the borrower does not have to be in default in order to “qualify” for a short sale. So long as a default looks likely, you can start a short sale. Which basically encompasses just about everyone in America that has a mortgage.
2. What It Does Differently: Here are the changes from the current system…
- Strict Deadlines (Finally, some accountability!)
- Standardized Paperwork
- $1000 to lenders for administrative costs
- $1500 to sellers to cover closing costs or for moving expenses
- Up to $3000 towards paying the junior lien holders to release their lien.
- Allowing a minimum of 90 days up to 1 year to market and sell the property
- No foreclosure may occur during the marketing period specified in the short sale agreement.
- Mortgage servicers may not charge fees to borrowers for participating in Foreclosure Alternatives.
- Mortgage servicers may not lower real estate agent commissions after an offer has been received.
If you would like to hear my take on each one of these items individually, please refer back to a previous blog post on made on the subject a few months back titled Sneak Peak at Treasury’s Plan for Short Sales
3. So What?
Well, if it hasn’t dawned on you yet, bless your heart, it may not dawn on you in time for you to cash in. The mere fact that the government of the United States, with all it’s battles it fighting, from Afghanistan, Pakistan and Iraq to all other domestic issues, for it to take the time and energy to try to help improve the short sale process, is a monumental milestone that can’t be underestimated. How else can anyone better prove that “NOW IS THE TIME!” than to show that the Feds want to make short sale investors and agents lives easier.
Homeowners are being helped, banks are being helped and investors and agents are making a fortune right now, all around you, by doing short sales.
This week alone, our students combined profits, meaning cash in hand (not equity) is at $153,000 and climbing…because today is only Wednesday. I’ve spent just about every waking hour this week on the phone with title companies reviewing HUDs and helping our students collect their portion of that $153,000.
How would you like to have a portion of that in your bank account right now. Wouldn’t it be nice to be making more money during this holiday season than will go out in purchasing gifts? You can. It’s real simple. Start doing short sales the Short Sales Step by Step way and you’ll never look back.
CLICK HERE to get started today making more money faster the Short Sales Step by Step way.
I am currently involved in a short sale where the bank has approved the short sale with the total loan being $956K, An offer of $700 was submitted and last month the bank said the buyer would have to come up to $750.
Your notes state that the cap on the loan amount is $729K, is that retroactive and will the lender be forced to withdraw this short sale?
It’s nice to see the government confirming what we already know to be true. Short sales are the best strategy to help lessen the financial burden for banks, sellers and buyers. Truly win-win-win.
The $730,000 refers to short sales that will fall under the new government program. You can still do short sales at all price levels, it’s just that it won’t come will all the fringe benefits as the ones that fall within the Treasury’s new rules.
I am working two short sales, both require different info, some very little and other life history… I hope this new program will be standardized, and yeah the commission structure sounds great, we are at their mercy right now. When will the new program start. M
Starts in April 2010.
Also, are you a part of our program? Because we have some ways to streamline this process as well that you won’t hear anywhere else. I suggest joining our program and we can help sort out the madness for you.
Finally, an end to all the bank bs! AND they got the bail out money! Go figure right!
Great post.
The government seems to know what they are doing although they always compensate for what they do not know ( specifically HUD ) by adding more and more paperworks to an already complicated system. Eventually, because of the requirements to fulfill their standards were so bureaucratically thick, people will fall out.
These are great news for us investors ( or wannabe investors ) since we can follow a system that they are laying out to general public. Plus, the banks could finally be liable if they break those rules !
Banks are more dangerous than our military system !
Hi Phil,
I went from the top of your program and read through to the very end. It is a unique and an elaborate apprenticeship course. However, the affordability of it is what is holding me back, even at that lowest price.
Sincerely,
Emmanuel.
Then you’re best bet is to raise some capital from friends, family, other investors or to simply raise money from a job or something. As you probably found, we provide the most comprehensive program in a America for close to nothing. So this is your best bet. All that is standing in your way is a couple bucks. Don’t let such a small hurdle proclude you from financial freedom.