Fannie Mae and Freddie Mac recently decided to start require mortgage servicers to be quicker about making decisions on short sales. In the past, short sales could take several months to complete as everyone -- servicers, borrowers, buyers, investors, lein holders -- had to agree on a transaction before it could proceed. A shortened timeline and more streamlined process means homeowners considering the option of a short sale may be able to sell their homes faster.
Recent statistics show short sales are outpacing foreclosures. That’s good news because short sales often aren’t as damaging as foreclosures are to neighborhood values. Short sales usually don’t sell quite as low as or sit on the market quiet as long as foreclosures.
An article I just read suggests short sales could be the housing market’s knight in shining armor and suggested better informed buyers and sellers can also speed up the process considerably.
The President and CEO of BSI Financial Services, spoke about short sales at a mortgage servicing conference last week. “A better educated borrower from our perspective is a better borrower,” he said, noting that the more a buyer is educated about the process, the less in denial they are about their ability to get themselves back on track. “This,” he said, “leads to a more rational discussion that results in a faster turnaround and an easier time for the servicer and the homeowner.”
A short sale production executive for Bank of America agreed with Sharma, and said more real estate agents are also catching on to the short sale process. “They are the primary person that guides the process and ensures its success,” she said.
Short sales occur when a lender agrees to let a homeowner sell their home for less than what is owed on the mortgage. The lender forgives the difference and the borrower is able to walk away from a home they can no longer afford. A short sale can be a nice option for homeowners who are struggling.
A real estate agent who has experience in short sales can make it a very easy and effective process by keeping the homeowner informed. In upcoming blogs, I will speak more about the process and my experience with short sales. Homeowners with questions about the short sale process can contact me at 678-478-2424 or John@PetersenPartners.com.