U.S. Treasury Moves Quickly To Offer Rewards for Short Sales!

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12 % - That is the number of home owners that actually have successful loan modifications done. What happened to the other 88%? They have been relatively unsuccessful in re-modifications of their home loan, at no fault of their own in most cases.

According to many realtors (who shy away from short sales), lenders can take up to 6 months to successfully negotiate a short sale or loan re-modification. The reason for this massive delay is the fact that there are just too many loans in danger of default.

The only thing left for these homeowners who are unsuccessful in reaching an agreement is foreclosure. The foreclosure process alone is very costly, having to deal with evictions, past due HOA fees, taxes, etc. Not to mention that a majority of foreclosed homes are left in deplorable shape. Many times they are left without appliances, holes in walls, and sometimes without any walls at all!

These foreclosed homes sit vacant for months on end waiting for the foreclosure process to finalize market and sell. This leads to a whole batch of new problems such as; squatters, vandals, and thefts such as AC units.

With an estimated 7 million homes in the pipeline ready for foreclosure, The U.S. Treasury has finally realized the problems facing successful short sales and loan modifications and has implemented a new plan. Incentives for both the lender and buyer!

The U.S. Treasury has an upcoming plan which would use up to $10Billion dollars of government funds strictly dedicated for those homeowners seeking loan modifications and short sales. The funds will be used for various purposes such as; “catch-up payments”

The details of the plan are in the final stages of completion, but here is a brief description of what it should entail; “Paying lenders $1000 to successfully negotiate a short sale, loan re-modification and/or deed in lieu transactions”

For the homeowner, they can expect a payment from the Treasury as well; “Possibly $1500 in closing fees paid for agreeing to a short sale” If there is a second mortgage holder on the property – they can get paid up to $1000 as well to sign away any and all claims against the property.

This U.S. Treasury Plan will hopefully help both side’s homeowners and lender to move a little more quickly to avoid unnecessary expenses if they aren’t successful associated with foreclosures. Expect more news regarding this plan in the upcoming weeks.

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