Jason Bernabei, TriCastle Realty
DEL MAR — October 15 2012 : Goooooood Monday morning Saaaannnn Dieeeego!!! New short sale guidelines are coming November 1, 2012 that ought open up the short sale market, while also stimulating the rental market in a very big way.
Both Fannie Mae and Freddie Mac have united on a single short sale process called “HAFA II” or the “Standard Short Sale” program. According to First Tuesday Journal Online: The California Real Estate News Source, (FTJO), article entitled “No sugar from FICO for Frannie’s non-delinquent short sellers”; the agencies believe that the union will make short sales “uniform, faster, easier, and clearer.”
According to the FTJO: homeowners current on their mortgage payments will be eligible for a short sale if they meet other hardship criteria, including death of a borrower or co-borrower, divorce, unemployment, disability, or job relocation.
The FTJO also reveals some interesting details from the program that will debut in less than 2 weeks. For example, deficiency collection will be waived in exchange for a “cash contribution” from borrowers meeting specific financial guidelines (contribution not to exceed 20% of the borrower’s reserve funds or other assets). Also, members of the military who are being relocated will be automatically eligible for the program; and up to $6,000 will be offered to second lien holders to speed the short sale process.
The article goes on to develop an opinion piece, forecasting how these changes will impact the marketplace, with one particular consequence jumping out at me. As previously mentioned, this new avenue for short-selling afforded those home owners not behind in their mortgage payments ought be good news for landlords with rental properties. Not only will more folks be leaving their short-sold homes, but early indications are that those current mortgagees will face consequences on their credit report that are not a whole lot different than those that had defaulted prior to short selling. The article details that those short sellers unable to secure a “Paid as Agreed Provision” from the lender in closing will be on the sidelines for several years, in terms of their next opportunity to buy via mortgage lending. These folks will therefore keep the rental market strong not only in their initial departure from home ownership, but for those next few years, at the very least.
If you are looking to short sell your home and would like a shot at NOT being left on the sidelines after fact, or if you are looking to buy a short sale property, feel free to contact me, Jason Bernabei at TriCastle Realty today. Until next time San Diego, enjoy this beautiful fall weather and these very low mortgage rates to boot!
Jay’s Outlook: surprisingly sunny
Jason Bernabei, TriCastle Realty
