A number of Sequim and Port Angeles homes have been for sale subject to short sale approval. This means that the selling price agreed upon by the buyer and seller will require the bank holding the mortgage to agree to accept less than the balance of the mortgage. The practical problem here and in many parts of the U.S. is that we can’t get these short sales approved through the banks if our lives depended on it. I’ve written about how impossible it is to get bank cooperation, even when the offer is very reasonable.
The Feds have compiled new guidelines for banks to implement a short sale, which take effect in April of 2010. This may be good, although I’ve seen the guidelines, and even though I was a lawyer, I dreaded the idea of having to read this massive document full of legalese and bureaucratic phraseology. I’m not going to read it. If you want to, here it is: Short Sale Guidelines.
I will cut to the chase for those of you who want the 411 without further ado.
Basically, these guidelines, which are voluntary, will allegedly provide a template of procedures for banks to use around the country, so we can get these short sales done in a reasonable period of time with some sort of standard.
Two points of interest to me. First, the guidelines are to provide standardized forms, procedures, and timelines to allow the borrower to receive pre-approved short sales terms prior to the property listing. Wow! That would be a miracle if it actually happens.
Second, the borrowers are to be fully released from future liability for the debt. Wow! That would be miracle two if that happens. According to the guidelines, these are supposed to happen, at least for the banks that agree to voluntarily participate. Let’s hope they all do.
You can read more about short sales, the process and the challenges at Sequim Short Sales.
Last Updated on July 27, 2012 by Chuck Marunde
