Good Morning

Thought I would share this Short Sale Newsletter from Platinum Group Services.

 

Short Sale Newsletter

July 12, 2012

Servicers have 30-60 days to render decisions on short sales?

A new directive from the FHFA (which oversees Fannie Mae and Freddie Mac) recently became effective on 6/15/2012. It dictates that servicers must decision a short sale transaction within 30 days of receipt of the complete short sale package. If the servicer fails to render a decision within this timeframe, they have a 30 day extension (full decision rendered within 60 days) and must provide status to the Agent and homeowner on a weekly basis after the initial 30 day time period has elapsed. Sounds great? Is it too good to be true? Let’s dig deeper:

The directive applies only to 1st liens that are guaranteed by Fannie Mae or Freddie Mac. It does not apply to FHA and VA loans, portfolio loans, or private investor loans.

The package must be complete in order for the “clock to start ticking”. If the short sale package is incomplete or contains outdated documents, the servicer does not consider this receipt of a “complete” package; therefore their 30-60 day timeline does not begin. All documents must be dated within 30 days from the time the package is reviewed by the servicer. This includes paystubs, bank statements, and any other documents (hardship letter, financial statement, etc.) that require a dated signature. Even though all documents may have been updated when the package was submitted to the servicer, if the bank’s negotiator does not review the package until 35 days after it was submitted, documents will be stale and will need to be updated.

The date that is considered “receipt” of the complete package is actually the date the servicer acknowledges receipt of the package. For example, certain servicers that use the Equator system to negotiate their short sale have tasks that an Agent needs to complete in order to “initiate” the short sale. Previously, it might take a servicer 48-72 hours to review the initiation task. Completion and review of this initiation task would start the 30-60 day clock. However, now some servicers on the Equator system are taking 25-30+ days to review the initiation tasks. Why? It effectively stalls the 30-60 day clock from starting on new files so that the bank’s negotiator can work on existing files that are on their desk.

Are your files getting kicked out of Equator causing them to be re-initiated for seemingly no reason? Re-initiation causes the 30-60 day time period to start from the beginning again.

 

While this new directive definitely had the right intention and there is no doubt that servicers want to do all that they can to improve their timelines to decision short sales, the reality is that there are loopholes to the new directive. The volume of short sales has increased by 25% in the past year. Have the servicers staffed up enough to not only handle this increase in volume but also to meet the new restrictions on the decision timeframe? That’s doubtful. Short sales are more challenging than ever.

If you need assistance with your short sale transactions, please contact Platinum Group Services at 866-844-2659 or visit our website at www.platinumgroupservices.com We’ve closed over 1,000 short sales and earned Agents over $15 million in gross commissions. We’ll be happy to help you navigate the challenging waters of short sales.

View some of Phyllis Wolborsky and The Wolborsky Groups Listings and let us know if we might schedule a showing.

http://www.phyllisdiditagain.com/Properties

 If you are in the market to buy or sale real estate please visit my website at www.PhyllisDidItAgain.com or www.AllenTate.com/PhyllisWolborsky to view all of my featured listing and the listings offered by our MLS service. Call Phyllis Wolborsky at 919-876-2372, Visit Brian Wolborsky at www.Raleighhomeguide.com, or call 919-427-9508, call Mitchell Wolborsky at 919-270-1049, Kevin Wolborsky at 919-608-2000. Also Randy Scherr at 919-272-0191.

Have a great day and it would be our pleasure  to assist you.