New HAFA rules should speed up short sales
Starting February 1st, there will be some NEW HAFA RULES which should help ease the pain of buying or selling a short sale. Below are the three important items discussed in the Realtor.org article.
#1 “Once a sales contract has been initiated, loan servicers then have 30 days to approve or reject the transaction.” This should speed up the rate at which it takes to close on a short sale. Right now there are twice as many short sale listings than bank owned listings on the active market, but there are 2-3 times as many sale pending bank owned properties than short sale properties. It’s pretty obvious what’s more attractive to buyers.
#2 “Another big change: Loan servicers will no longer be restricted on paying second-lien holders, allowing them more freedom particularly when dealing with second-lien holders when borrowers owe less than $100,000. Loan servicers used to be restricted to paying second-lien holders no more than 6 percent of outstanding loan balance (with an overall limit of $6,000) in exchange for releasing subordinate liens. Second-lien holders have been another big obstacle to completing short sale transactions.”
#3 “It does not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA).”