03/13/2015
Your Short Sale Sellers Receiving 10K in Assistance
Two significant changes have impacted short sales closing after February 1, 2015. It is important to know that these changes do not apply to loans owned by the agencies; specifically, Fannie Mae, Freddie Mac, VA, FHA and Rural Housing. In essence, these changes will apply to approximately 40% of loans categorized as non-agency. The changes with the largest impact to homeowners considering a short sale are as follows:
Relocation Assistance: We have numerous borrowers being paid relocation assistance or incentive of up to $10,000 on approved HAFA short sales. With respect to rental property, a tenant that occupies the property as a primary residence or a borrower's legal dependent, parent or grandparent will also qualify for assistance totaling $10,000.
Subordinate Lien Release Payments: The prior aggregate gross proceeds that was allowed to be paid to a junior mortgage lien holder was $8,500. The new directive eliminates the cap amount that may be paid for a release and allows the servicers to establish their own caps, however the minimum amount must be $12,000.
These changes provide significant incentives for homeowners and junior lien holders to proceed with a short sale. It provides further evidence that lenders do not want to proceed with foreclosures and the subsequent liability associated with taking back homes. The positive impact would certainly be more significant if they applied to agency-owned loans as well, however it is not uncommon to see those agencies follow with similar changes at a later date.
Short sales are still expected to be between 15% to 20% of total sales in 2015. The Loan Workout Group is still fully staffed and ready to assist realtors and homeowners understand and navigate the complex approval process. Now in our 8th year, LWG is well established as the local leader with unmatched experience, knowledge and commitment to our clients. Call today to experience the difference we can make.