John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Veteran real estate broker Bobby Burnett has completed about 400 short sales in the Denver area during the past five years.
Although Burnett, principal of Keller Williams Realty – DTC, completed one short sale in nine days, others have taken six months or more. Typically, they take about 60 days, he told me. (For more on the toll short sales are having on the market, please visit this blog.)Short sales frustrating
Given what a frustrating, time-consuming ordeal it is to close a short sale, in which the lender accepts less than the mortgage balance from the home seller, Burnett was delighted when he recently read about new rules to streamline and speed the process. The U.S. Treasury also outlined guidelines for deeds-in-lieu of foreclosures.
The only problem is that the articles he read were short on details, such as when the rules go into effect. And every lender he spoke with, was equally in the dark. And none of them were following the new rules.
So I contacted Meg Reilly, a spokeswoman from Treasury.
New short sale rules coming shorlty
“Servicers must implement the requirements on or before April 5,” Reilly wrote to me in an e-mail. “They may begin offering short sales immediately and like other aspects of our program will be paid retroactively for any short sales done before the effective date.”
She also gave me the 43-page explanation of the updated rules., which you can access at this link. Among other things, the rules allow the loan servicers to pay second-lien holders up to $3,000 and the homeowner borrower with the underwater mortgage can receive an incentive up to $1,500.
Burnett, a Certified Distressed Specialist, said that short sales are now the bulk of his business.
He thinks that lenders are going to wait until the April 5 deadline before implementing the new program.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
