Short Sales Should Eventually Become a Shorter Process

If you are a troubled homeowner who was at risk of having their home foreclosed on you may be considering something called a short sale and you may or may not be familiar with the process of a short sale.  If you are considering the process of a short sale for your home as an alternative to foreclosure it may be the best things for you because unlike a foreclosure the debt does not stay with you and it does not go on your credit report that you have been involved in a foreclosure (foreclosures stay on your credit report for 7 years).  But one thing that short sales are known for in the past are for not being short.

Short sales usually never take under three months to close.  As a matter of a fact, short sales on average take six months or longer.  Eventhough the process is worth the wait for the seller and most of the time, as long as the sale goes though, for the buyer and bank also.  But that is not to say that the wait is not a time that many wish would go buy faster.

According to a recent announcement made the Department of Treasury has decided to step in and do something that sellers can’t do when they are involved in a short sale and that is tell the banks to make the short sale process and loan modification process go by faster.  The main thing motivating the Department of Treasury to make the short sale process faster is that currently 80% of all short sales fall through because the process is taking too long and the buyer decides they no longer want the home.

Other people than the seller and purchaser will profit from changes being made to the short sale process in the future also.  Real estate agents have been reluctant to take on short sales because a lot of times it results in the realtor’s commission being decreased in order to allow the sale to go through when the lender says that they would like the house to be sold at a higher price than what the purchaser is willing to offer.  Often times the real estate agent decreases their fee in order to allow the sale to still go through – under the new short sale rules this will no longer be able to happen so realtors may be less reluctant to accept short sale deals.

Under the new short sale rules lending institutions will be required to approve or disapprove a short sale within 10 days and will also have to excuse the individual applying for the short sale from all debt obligations once the short sale is completed.  The Department of Treasurty has advised banks and lending institutions that they have until April 5, 2010 to put the new short sale rules into effect.

 

Steven T. Decker is an experienced real estate lawyer, author and speaker. With over 20 years of experience, Steven represents individuals and investors in the purchase of residential and commercial real property. Steven is the author of "The Five Myths that can Ruin the Purchase of Your Home" and he is the publisher of the "New York Real Estate Law Blog". If you are buying or selling a home or commercial property in Staten Island, New York City or New Jersey contact Steven T. Decker, Esq. to discuss the services that he offers and how his legal representation will assist you.

IMPORTANT DISCLAIMER: The information contained on this website is provided for general educational purposes only, should not be relied on as legal advice and does not serve to create an attorney client relationship. In utilizing this website you acknowledge that there is no attorney client relationship between you and Steven T. Decker, Esq. and that the information contained on this site does not and cannot serve as a replacement for the competent legal advice of a licensed attorney in your state. The content of this website is subject to the Copyright of its author, Steven T. Decker, Esq.
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