Things are changing on the short sale side of things and you should know about these changes.
Everything we knew about short sales is about to change. Good or bad, it is hard to tell. The government changed things with the "Making Home Affordable" (MHA) program. This program is now being managed by the Treasury and Fannie Mae. It covers more than 85% of mortgage loans, which include loans owned or guaranteed by Fannie Mae or Freddie Mac. It also includes FHA loans and loans managed about about 50 major servicers.
It seems to be an attempt by the government to tidy up the short sale process. Having very little faith in the government at this point, however I have my doubts.
- One of the points being made is that there are all those Loss Mitigators out there that need to be trained before it can be implemented.
- Word is that Freddie Mac has been called into service to "audit servicers" files and fine servicers who are not using the new MHA process. WOW some regulation coming from the government. Interesting, however my guess is that for those few banks that are helping the Consumer, it will be a way to stop short sales.
- In the new plan, the Loss Mitagator is the initial point of contact for the Consumer in their search for options in keeping their home. If after all options are explored, then and only then will a short sale be considered.
- The Loss Mitigator will use a net present value formula to determine if the lender/investor will net more from a short sale than from a foreclosure. They say the decision is strictly a financial one. If a short sale is selected for the seller, the seller will continue to list with the listing agent, however the listing price and listing term will be determined by the Loss Mitigator. The servicer/lender must still approve the short sale.
- The servicer/lender can no longer negotiate down the short sale commissions.
This is all very interesting indeed. I wonder where the Loss Mitigator will come to understand local markets, trending marketing conditions and present market value for the property.
Additionally, how will they judge Realtors and Real Estate Agents and their ability to market the property.
All interesting questions. It seems to me that the government has just figured out a way to control more of the real estate market with a plan that let's them determination that more homes should go to foreclosure. Is the real agenda to take away all the homes from all Consumers.
One has to wonder.
Too bad they can't just adjust the loan to 90% of current value and appealing interest rates and allow th current owner to remain in the property . I know they have tried but I sure think if the seller has the ability to pay the reduced amount they should do everything possible to keep them in the house.