What do these new short sale guidelines mean to you? The new federal push provides lenders with financial incentives to accelerate the short sale process — $1,500 for servicers to cover administrative costs and up to $2,000 for investors, according to the National Association of Realtors.
Still the guidelines are voluntary, and to be eligible a homeowner must of taken out their primary mortgage before January 2009 and owe less than $729,750, among other requirements.
Here are some highlights of the program provided by Goldie Sommer, a Fairfield attorney who specializes in short sales:
-  Every potentially eligible homeowner must be considered for HAFA by a participating lender before the loan is referred to foreclosure.
-The lender can’t require a cash contribution from the homeowner, nor can the lender require that the owner sign a promissory note at the closing.
- The lender can’t go after a borrower for a “deficiency judgement,” or the difference between how much a home sold for and the amount owed.
- Under the guidelines, the borrower can receive up to $1,500 to help
with relocation costs.
- The guidelines also force participating lenders to give borrowers standardized forms, processes and deadlines.
- The homeowner may now receive pre-approved short sale terms prior to the property being listed. That means a lender would have to tell a borrower the minimum amount they’d accept on a short sale.
- Additionally, if the short sale doesn’t go through, the program outlines rules for deed-in-lieu-of-foreclosure agreements — in which an owner agrees to hand over their homes to their bank. Just as with the short sale, the servicer can’t request any cash from the homeowner, require a promissory note or pursue any deficiency judgments.

This is an overview of the program. We will expand on this in future posts.

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