Fast Short Sale process with the help of new Short Sale rules

Short sales, like the name always take a long time in process because the word short in short sales refer to the shortage of money not the time. When someone buy a home through short sale, it allows a homeowner to sell his property for less amount than the original amount  the house owed with the approval of lender. For the starters of the short sales only those banks can participate in this program that has the federal government TARP (Troubled Asset Relief Funds) relieve funds. Allowances are designed for all the banks to join for example offering $1,000 to lenders for administrative costs and if they work in the same way they are supposed to do some activities including;

• Buyers of the short sale have to offer a documentation of funds or a preapproval letter from a lender with their offer of a short sale and if someone is selling his house he has to give this documentation or preapproval letter to the lender within three days.
• This offer should be approved or deny by lender within 10 business days.
• To do safe the existing homeowner from the restrictions lender is not allowed to require the closing before 45 days from the sales contract date unless the seller gives his okay.
• If someone is buying a house through short sale he cannot sale it for next 90 days. Most of the people don’t think about to sell their house soon, but some of the members do quick contradiction and make hash of the market with blown up prices. This new rule is designed to prevent from the earlier selling.
• HAFA (Home Affordable Foreclosure Alternatives program) short sales are not allowed to involve selling the property to a friend, family member or anyone with whom someone have a close personal or business
• No foreclosure can be done during the marketing period which is specified in the short sale agreement.
• Mortgage services cannot take fees from the borrowers who choose a short sale instead of foreclosure and neither they can have lower real estate agent commissions after that an offer has been received.

Short sale deficiency agreement consultation or mortgage collection of any type with a seller’s mortgage lender is not with the scope of a real estate license. This decision is basically made by the Maryland Real Estate Commission, and accordingly this decision now there are new rules which are governed that how Maryland real estate agents can handle short sales. Agents and brokers all over the United States are affected by the determination of other State Real Estate Commissions.

After the federal Trade Commission’s MARS Rule the law patterned is designed to protect the homeowners from the financial problems and situations.  At the time of economy delays some of the agents take benefit from the situation and came out by offering wrong mortgage relief services to the worried homeowners. The FTC rule is specifically designed to prohibit any kind of mortgage Relief Company which can include Maryland real estate agents from collecting any fees until the homeowners are facilitated from mortgage lender with a written offer that is acceptable to the consumer. Additionally, anyone who is engaged in mortgage relief must disclose some of the matters including that;

• They are not associated with any government,
• The lender may not agree to the proposed plan, and
• If the homeowner is told to stop paying the mortgage, they must also be told that they could lose their home and damage their credit rating.

 The new rules of Treasury’s Home Affordable Foreclosure Alternatives HAFA are designed to speeding up lender’s decisions of short sales and by making the life easier for sellers.  Basically HAFA is an alternative program to the more desirable HAMP the Home Affordable Modification Program. Both of the programs are planned to keep the borrowers in their homes and out form the foreclosure. Homeowners are evaluated for a HAFA short sale if they are eligible for HAMP and the following two criteria apply to the borrower:

• Drop out of a HAMP modification by missing payments or isn’t offered a trial modification; or rejects a loan modification offer.
• Lender doesn’t have a non HAMP loan modification for the homeowner.

Borrowers who qualify for HAFA and request a short sale receive a seven page document called a “short sale agreement” from their lenders. Two weeks’ time is given to borrower to respond on the short sale agreement. After responding to the short sale agreement, the borrower has four months to sell his house. A real estate agent is hired by the borrowers.  Meanwhile, the lender hires someone to assess the property’s value.

Reading about all of the rules is might easily to persuade a homebuyer or homeowner to stay away from the short sale. But everyone should keep in mind that the real estate specialists and bankers are the ones who compete with the paperwork and phone calls and because of it a Realtor is always there to help the sellers’ throughout the process.