US Boosts Short Sales HAMP Hits 500,000 US Boosts Short Sales
Fort Worth, TX-The Treasury Department's Making Home Affordable program is incentivizing servicers to do short sales. Treasury's expansion includes standardized documents and a participation agreement that will be executed on the front side by the buyer, seller or agent, the seller themselves, the servicer, the MI company and the investor.
That document is about six pages long and very clear in its itemization of what's required in doing a short sale, said Jim Satterwhite, executive vice president and COO, National Infusion Technologies.
"There's very specific timeframes on service responsiveness and lending itself to the need for technology to support that process. It's very specific about the responsiveness requirements on submission of offers. It's very specific on the 120-day marketing period and what the seller must do during that period," said Mr. Satterwhite.
"There are provisions that should the servicer desire, that it would immediately refer them to a deed-in-lieu program after it has been shown as being marketed and everyone has been shown to be cooperative to the circumstances. That would be a further derivative of a more respectful way to transition out of the property that can't be afforded anymore or whatever the distressed situation may be."
Amy Brandt, chief executive officer of Vantium Capital Inc., said the Treasury program puts political pressure on everyone to focus more on short sales.
"Only 14% of sales last month (August) were short sales. It takes nine and a half weeks to complete a short sale. That's way too long," said Ms. Brandt. She told conference attendees in the room that there is a lot of outsourcing on "just modifications" and the passing back and forth of consumers.
"Borrowers are contacting the servicer looking for a solution. If they don't fit into one niche, you're supposed to say you can't help them and they have to move towards the foreclosure process? It seems pretty silly to me if you are having a dialogue with a consumer about their situation, that you are not able to offer other solutions. Now we're having a little more focus on an alternative strategy of short sale and ultimately perhaps deed-in-lieu. It's a step in the right direction."
Tracy Medina, the real estate manager at Titanium Solutions, works with servicers across the U.S., some of whom are starting to do pre-approved short sales. The company has over 7,500 agents right now and is looking for 2,700 more to assist in the process of a short sale.
Mortgage insurance guidelines can be found online. Some require promissory notes to be signed by the homeowner, she said. "We suggest to the agent to have a lengthy conversation with the seller. Find out how they got the loan. Did they buy it as a primary residence or as an investment property? Do they have money to bring to the closing and are the willing to sign a promissory note? Knowing all those things is imperative when negotiating a short sale."
Agents should send the short sale package during the listing period to take a more proactive stance, so they are not waiting until the offer has been received. Travis Olsen, president of National Short Sale Center and COO of Loan Resolution Corp., says to work hand-in-hand with the servicers and the outsourcers to gather that complete package during the listing period.
"That way, when the offer does come in it can be rapidly approved," Mr. Olsen said.
"Those are some of the things the industry will start seeing in conjunction with the valuation being ordered at the time of the listing, so essentially there is very little to do except analyze the offer when it comes in to either approve or deny the short sale or counter it."
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