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New Foreclosures Short Sales Help With New Policies


— Photo Courtesy of http://www.myshortsaleangel.com


FHA loan foreclosure “starts” increased for the second quarter 2012. The  older  foreclosures have been processed  through the market  but now because of the mortgage settlement, mortgages that were late some time ago are only now starting  the foreclosure process.

To move through the new  foreclosure short sale offers policies  enacted this summer  by Fannie Mae and Freddie  reduces the short-sale timeline process to expedite the pre-foreclosure sale process to include short sale offers.   Servicers are “encouraged” to follow these requirements with respect to mortgage loans sold to either Fannie or Freddie, including FHA, VA and USDA loans they may have purchased.

Last month another bill was introduced to assist  with the short sale process.  The bill addresses one of the major road blocks to closing short sale offers and that is the problem with non cooperating secondary lien holder.

Rep. Jerry McNerney (D-Stockton)  introduced a bill to speed up the short sale process by requiring subordinate mortgage lien holders to make a decision on a short sale within 45 days.

The bill called “Fast Help For Homeowners (FHFH) Act”  has full support from the National Association of Realtor.  The NAR stated that its members continue to report delays in completing short sale transactions due to drawn out response times for whether or not an offer was accepted by the secondary lien holder.

“Second mortgage lien holders frequently hold up and cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner’s lien, even though the secondary lien holder often gets nothing if the home ends up going into foreclosure,” said NAR President Moe Veissi, in a statement. “While efforts have been made to improve primary lien holders’ response times, issues still abound with second and subsequent lien holders, and this legislation is a step in the right direction.”




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