Monday Market Report – The New Rules for Short Sales

The federal government and state attorney’s offices have been hard at work investigating the activities of five of the largest banks/mortgage servicers in the country (Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo).  After a long negotiation with these banks and mortgage servicers a settlement was reached.  The end result – the banks have agreed to pay $25 billion in relief to distressed homeowners and to state and federal government.

This is all a result of the “robo-signing” scandal where loan servicers were signing foreclosure documents without actually knowing if the documents were accurate and without a notary present.  Yes, that’s against the law!

What does this mean for you as a homeowner in Orlando Florida trying to sell a home?  As part of the settlement, lenders will now be forced to follow strict timeframes.  The new requirements for lenders reviewing a short sale are outlined below:

  • Mortgage servicers must give a decision to a borrower within 30 days of receiving a completed short sale request package.
  • If a servicer takes more than 30 days on more than 10% of the requests submitted, the servicer will be considered in “potential violation.”
  • The settlement also requires the servicer to notify a borrower within 30 days if any documents are missing from the submitted short sale package.
  • Servicers are also required to notify a borrower if there is a deficiency payment needed before the short sale is approved, including an estimated amount.
    • And if more than 5% of all short sales approved in a given quarter did not include this disclosure, the bank will be in violation.
  • The servicers’ internal audit groups are required to review all short sale requests within the first two months of the quarter.

It will take a while to see how these new rules affect our short sale process; but all in all it looks like a good start to taking short sales from indefinite to “short” or 30-60 days for approval.

If you are thinking of short selling your home in Orlando, complete the form below for a free consultation on how we sell homes now!

 

Photo credit: southernfried from morguefile.com

Advertisements

About Kathryn Stelljes PA

I am a Realtor in the Downtown Orlando area. I have earned a Bachelor's Degree in Marketing and a degree in Residential Planning. My background in these design fields has advanced my ability to sell in the realm of residential real estate. As a native Floridian and resident of Downtown Orlando I understand the growing needs for homeowners in the Central Florida home market and specifically the Downtown market. I enjoy sharing information about businesses, fun events, and the historic homes and neighborhoods that make Downtown Orlando such a unique and vibrant place to live. I love Italian Greyhounds, old houses, interior design and design blogs, social media networking, and anything marketing related.
This entry was posted in Economy, HomeBuying Trends, Monday Market Report, Real Estate News and tagged , . Bookmark the permalink.

Tell me what you think

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s