New Fed Short Sale Rule Falls Short
Like most programs aimed at helping distressed homeowners, the new Fed rule is not likely live up to its promise.
Palm Coast, FL – February 25, 2010 – Short sales are the predominant type of closings occurring in our Flagler County market. With more than 600 short sale properties on the market, the lenders’ delayed response to short sale offers continues to hurt our market by causing unreasonable delay in the absorption rates and a continuing slide in home prices. “The delay in responding to a short sale offer is not doing anyone any good including the lenders” says Chuck Shaffer of Palm Coast Real Estate.
New US Treasury Rule
The new Rule will now give the first lien mortgage holder a 10-day limit in which to respond to short sale offers. The Rule calls for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.
<Read: Supplemental Directive 09-09
But beware!!
The new Rule may end up being yet another bust because only banks that owe TARP bailout funds must comply. If pressured to make a quick rash decision, I fear the lender’s answer will simply be "no….unless you can wait another 60 days" More importantly, the Rule does not apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. Lets cross our fingers and hope the Feds develop some effective legislation which will help us, the consumer, rather than the banks.
The new Rule may end up being yet another bust because only banks that owe TARP bailout funds must comply. If pressured to make a quick rash decision, I fear the lender’s answer will simply be "no….unless you can wait another 60 days" More importantly, the Rule does not apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. Lets cross our fingers and hope the Feds develop some effective legislation which will help us, the consumer, rather than the banks.
By: Michael Chiumento III of the law office of CHIUMENTO & GUNTHARP, P.A.
Which Banks owe Tarp
Can we get a list of the banks that owe TARP money….at least the major ones?
Mortgage Loss Mitigation
Rick,
I am not sure where you can get this but it should be online. However, dont get too hopeful. These new rules are not really rules…they are guidelines. The whole industry is a mess. Worse, the government is pretending to do something for people but results to numerous NEW laws have produced little result. Either they know it or they truely lost…you pick.
New Fed Short Sale Rule Falls Short
You can go to wikipedia.org to get some of the recipients. Folks just Google your search. If you want to know about a specific lender, check their website.