San Diego Short Sales Just Got Easier
Here is a piece of good news for everyone. San Diego loan servicers taking part in the Home Affordable Foreclosure Alternatives Program (HAFA) are going to soon be held to stricter timelines for approving or rejecting short sales. Furthermore, they will also be given more freedom to pay off second-lien holders.
This comes as a great relief to anyone that has experienced trying to buy a San Diego short sale only to find out that the process can take an indefinite amount of time.
To illustrate the point, I represent a buyer who is closing escrow today on a condo in Downtown San Diego (January 11, 2011) who made an offer and opened escrow back in May of 2010. The property has actually been in and out of escrow for two years as a result of buyers less patient than mine abandoning the deal out of frustration. That not only led to an excurciatingly long process for everyone involved but the bank also ended up netting less money as the price of the condo fell further over the two year period. Everyone was a loser.
Now with the new rules, loan officers will have 30 days to provide distressed home owners with a short-sale agreement that includes the list price or acceptable sales agreement with hopes of helping people who fail to qualify for other government loan modification programs. Under the new policy loan servicers will have 30 days to accept or reject the transaction. This is a dramatic improvement to the way it has been up to now, which seemingly allows the process to drag on forever. The result should be improved confidence, both for those buying and selling San Diego short sales. Many distressed homeowners in today's market have actually opted not to pursue a short sale, even when it was in their best interest, due to the high level of uncertainty, both in result and time.
The new policies go into effect February 1, yet do not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or for FHA loans.