According to sources, the Treasury Department announced new guidelines designed to make short sale transactions go smoothly.
For a homeowner to qualify per these new guidelines they must meet the following conditions:
- The property must be a primary residence.
- The mortgage must be delinquent and close to defaulting. I know it sounds ridiculous, but lenders don’t want to talk to you unless you are behind. Even if you know next month you will be behind, they will have you come back next month.
- The homeowner must have taken out the mortgage before Jan. 1, 2009, and it must be for less than $729,750.
- The homeowner’s monthly mortgage payment must exceed 31 percent of their pre-tax income.
Another Bailout?
Under these new guidelines homeowners will receive $1,500 from the Federal government for selling their homes “short” (i.e. less than the amount owed on all combined mortgages on a given property). The guidelines allow for mortgage-servicing companies to claim $1,000 for each transacted short sale. Second-mortgage holders may receive up to $3,000 from proceeds at close of sale, assuming there are any proceeds, if they release any and all liens.
A big plus to homeowners who go through the short sale process under these new guidelines is that they must be “released” from future liability or potential deficiency judgement for the unpaid or uncollected debt.
