In case you missed it...2010 IS the Year of the Short Sale!
Here is the headline: New Obama Treasury Department program PAYS homeowners to avoid foreclosure….and do a short sale....should we call the new program...
'Cash For Walkers'?
Afterall, we already have..’Cash For Clunkers’ and the proposed ‘Cash For Caulkers’….maybe this new program should be called…Cash For Walkers?
Afterall, this is what happens when someone decides to take the Treasury Department up on their offer to do a short sale vs allowing the home to go into foreclosure.
We first reported on this detail of the soon enacted HAFA Program clear back in November. Watch the videos we made for you about HAFA..and why 2010 IS the year of the Short Sale.
In case you missed it…here are the details:
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
Agents, are you now 100% convinced that 2010 IS the year of the Short Sale? If not, go back and read those last few sentences again. Next, learn NOW how to become a HREU CDPD (Certified Distressed Property Designation). Watch the FREE Agent Short Sale Secrets video and download the FREE Short Sale book!
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
Re-read that. Part of the new HAFA program is that the lenders CAN’T Go after deficiency judgments. And….they can NO LONGER request that the seller sign a promissory note…or cash at closing. Watch the videos that we created for you…you need to understand what a simply massive shift will take place April 5th once the new HAFA Guidelines are in place. Watch the videos NOW.
“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
Agents, please understand…if the homeowner does NOT do a short sale…they are still on the hook for a possible judgment! Once homeowners learn about this….do you think they will want to do a short sale? Of course. Now the only question is…will you be the agent to list and sell that short sale? Learn the new proven ways to easily list and sell short sales. Become a HREU CDPD Now for only $97! Go here now to learn more.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
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