Short Sales – New U.S. Treasury guidelines that put a 10-day time limit on short sales, and add financial incentives for buyers and sellers could help homeowners on the verge of foreclosure.
Homeowners stuck while banks mull whether to approve short sales could benefit from new federal guidelines that give lenders a 
10-day limit to respond to offers.
The 83 loan servicers participating in the Obama Administration’s Home Affordable Modification Program, including Bank of America and JPMorgan Chase, are required to follow these guidelines for all borrowers who request short sales or who did not complete loan modifications.
Aside from imposing a 10-day deadline, the Treasury rules call for sellers to receive $1,500 moving allowances, and the sellers will 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 up to $3,000 in short sale proceeds to be distributed to less senior lenders.
Edward Goldfarb of RE/MAX PowerPro Realty in Davie doubts the Treasury will enforce the new rules. “There’s no teeth to them,” he said.
A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments and require improperly rejected loans to be modified.
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Sat, Jan 23, 2010
Residential and General