Short sales involve homes that are sold at a price that’s lower than the balance owed. Because such transactions generally involve multiple parties and long-distance negotiating, they are more complex than routine Virginia Beach home sales and can get so complicated that many prospective buyers won’t even consider making an offer on a short-sale property. And many of those who do make a bid often walk away because lenders take so long to make a decision. Normally, a short sale is drawn out and laborious, taking anywhere from 3 -6 months to get approved by the lender and to close.
In a move aimed at streamlining this lengthy process and thus keeping many homes from falling into foreclosure, the Federal Housing Finance Agency (FHFA) has issued new rules for Fannie Mae and Freddie Mac aimed at speeding up the short sale process. These regulations, effective June I, 2012, require that lenders make a decision within 30 days of receiving a short sale offer on a Virginia Beach home. They also must consider requests for pre-approved short sales within that same time frame. If the lender needs more than 30 days, it must give borrowers weekly status updates and a decision within 60 days of the initial application. This extension gives lenders more time to determine the value of the property or to get the approval of a mortgage insurer.
The new guidelines can prove to be beneficial for all of the parties involved. For lenders, it could mean saving a distressed property from falling into foreclosure, saving them tens of thousands of dollars in lost property value and costs of taxes, heating, and maintenance. Home sellers, too, would be better off because they often will take just a one-time hit to their credit score for a short sale rather than the multiple delinquencies associated with a foreclosure. And buyers get Virginia Beach homes in better condition because the sellers have been living there and maintaining the property.
Many lenders are already looking for ways to process short sales more efficiently, and several, such as Bank of America, Wells Fargo, and Chase, currently offer cash incentives to owners of distressed Virginia Beach homes to participate in a short sale rather than wait for foreclosure.
Most folks in the real estate field, while applauding the intent of FHFA, have adopted a wait-and-see attitude regarding the success of the efforts to streamline the short sale process.
April Partida is a Professional, Experienced and Results Oriented, Top Virginia Beach VA Realtor committed to meeting your needs.
April has distinguished herself as a leader in the Virginia Beach Virginia real estate market. April assists buyers looking for Virginia Beach VA real estate for sale and aggressively markets Virginia Beach homes for sale. April is also a Short Sales and Foreclosures Resource Specialist (SFR). Avoid foreclosure and short sale expert, committed to helping families in financial hardship find options to foreclosure.
You can reach April at 757-227-1777 or by email, firstname.lastname@example.org.
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