New Standard Short Sale Guidelines for Fannie Mae and Freddie Mac Loans Beginning Nov. 1, 2012 Makes It Easy To Complete a Short Sale. East Bay Home Owners to Benefit.

Oakland, California (EastBayDaily) — How Short Sales Work

For East Bay Home Owners, going through with a short sale usually causes a great deal of stress because it means that a person can no longer afford a property in which they own. There are a few different ways to get out of ones commitment to between the bank and the property, including bankruptcy or foreclosure, but many people are now choosing short sales because lenders have become more open to them. A short sale means selling a property for a lower price than owed on it and the lender agrees to waive this remaining amount. If one is forced to unload one’s property in a hurry, the best thing to do is learn as much as possible about this process then contact a local agent before once the smart decision is made to.

What it Means

When a lender agrees to a short sale, it means that it is accepting less than what is due on the property. In some cases, it might make more sense to foreclose the property and attempt to resell it, while in other situations; it makes more sense to go through with a short sale. The lender will agree to whichever methods gets it most of its money back. In addition, one must qualify for a short sale before the lender will even consider this proposition.

The Process

To begin the short sale process simply contact the lender/ servicer and speak with someone who can make a decision on the matter. A letter of authorization will need to be submitted to the lender, so that the lender can look into ones personal information to ensure that one is eligible for a short sale. As with any form of asset and property management, the lender has to look at the borrowers financial situation before coming to a conclusion. One must have a real estate agent provide a preliminary net sheet, which will give the lender an estimate of how much to expect to receive on the sale and, therefore, how short the amount received will end up being.

Making the Decision

In the end, it is always a good idea to have the short sale handled a l ocal real estate agent well versed in short sales. Short sales are only a good idea when this becomes absolutely impossible due to significant income changes in one’s life. These things do happen to people occasionally, so it is good to know that an option is available that can allow one to escape this burden under the right circumstances.

Beginning November 1st, 2012, these are the changes:

Lenders will now streamlined short sale approach for borrowers most in need.

Lenders will now have the power to quickly and easily qualify certain borrowers who are current on their mortgages for short sales:

Lenders will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes.

Offer special treatment for military personnel with Permanent Change of Station (PCS) orders:

Consolidate existing short sales programs into a single uniform program: Provide servicers and borrowers clarity on processing a short sale when a Foreclosure sale is pending. Fannie Mae and Freddie Mac will offer a maximum $6,000 to second lien holders to expedite a short sale

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Charles Lassey
ACL Real Estate

CA DRE# 01893837

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