LawsonGroupMediation

The new administration really screwed up the short sale industry by bailing out lenders and giving them an incentive to foreclose rather than approve short sales. Since then, they have been back-peddling to try to solve this problem.

A result of the government’s efforts is that 2nd mortgage holders will receive a $1,000 payout from the government if they will approve the short sale. This will encourage more of them to agree.

Another provision is the protection of agent commissions. Normally, the secondary market investor may have commission limitations by policy, but servicing lenders often try to negotiate those commissions lower. In my firm, we have procedures to prevent that for the agents we work with. However, under the new guidelines, the servicing lenders are instructed not to try to negotiate for lower commissions if the commissions are “reasonable”.

To what lenders do these guidelines apply? Well, most certainly to government-owned entities, HUD, Fannie, & Freddie. The government owns some of the others also. Some private entities may follow the guidelines particularly if they rely on government sources of funding.

To read the press release, go to the government press release.

If you want an instructional course to guide y0u step by step through the short sale process, we have published 2 books for you the can be purchased here on this site