The Obama administration announced today new guidelines for pre-foreclosure properties that should streamline the short-sale process and expedite deeds-in-lieu of foreclosure. The highlights of the guidelines are:

1. Mortgage loan servicers must determine if a short sale is possible before proceeding with a foreclosure.
2. Loan servicers will receive $1,000 from the government for successful short sales.
3. $1,500 to borrowers for relocation costs.
4. Up to a $1,000 to junior lien holders to release their liens. The government will pay $1 for every $2 put in by the senior lien holder.
5. Standardized documents to streamline the process and remove some of the complexity.
6. Loan servicers must give borrowers at least 90 days to market the property as a short sale and up to a year depending on market conditions.

More information will be on the way, but this should change the number of foreclosures that we were expecting to see. And though it is too early to tell I am hoping that it will make the tedious, frustrating, and slow process of buying a short sale faster, easier and more appealing to buyers who have been reluctant to write offers on short sales.

Tags: Mortgage Loan, Property

Posted on Friday, May 15th, 2009 at 12:59 pm and is filed under Foreclosures, Short Sale. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.