On May 14, 2009, Treasury Secretary Timothy Geithner announced new details of the Making Home Affordable Program which included a Foreclosure Alternative Program (FAP).
Download the Program Update Fact Sheet:
Download 05142009FactSheet-MakingHomesAffordable
Here is an excerpt from the press release:
"Foreclosure Alternatives provide incentives for servicers and
borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure
in cases where the borrower is generally eligible for a MHA
modification but does not qualify or is unable to complete the process,
which helps prevent costly foreclosures and minimizes the damage that
foreclosures impose on borrowers, financial institutions and
communities. The new details will simplify and streamline the process
of pursuing short sales and deeds-in-lieu, which will facilitate the
ability of more servicers and borrowers to utilize the program. The
program provides a standard process flow, minimum performance
timeframes and standard documentation, and it offers financial
incentives to servicers and borrowers to pursue these alternatives to
foreclosure."
The Foreclosure Alternatives Program calls for incentives to the servicers for completion of a short sale and relocation expenses for the homeowner:
Incentives. Incentives include: (1) $1,000 for servicers for successful completion of a short sale or deed-
in-lieu of foreclosure; (2) $1,500 for borrowers/homeowners to help with relocation expenses; and (3)
up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the
government for every $2 paid by the investors to the second lien holders).
Other program highlights:
Standardized Documents. The program will include streamlined and standardized documents, including
a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and
increase use of the short sale option.
Commissions. The Short Sale Agreement must specify the reasonable and customary real estate
commissions and costs that may be deducted from the sales price. The servicer must agree not to
negotiate a lower commission after an offer has been received.
Here is a press release from NAR summarizing the FAP:
Download Government_affairs_short_sales
The big question for Real Estate Agents? Have you embraced the short sale process yet? Now is the time to get educated and be a part of the solution. Make short sales your niche and help homeowners avoid foreclosure!
The Obama Administration is leading the way and pushing down from the top to streamline the process and encourage the banks to approve short sales.
Have you noticed that the Las Vegas inventory has continued to drop? REO listing agents are hearing from their asset managers that more inventory is coming - and they have been hearing that for months. It appears that several of the larger banks have been delaying the release of REO inventory and continue to slow down the foreclosure process. I feel that the banks are making the adjustments in personnel training and operations to streamline their process as they attempt to integrate loan modifications and short sales in the mix.
I am passionate about education and coaching. I have been encouraging the real estate agents that I manage and coach to integrate short sales as a specialty in their real estate practice. I have seen the hand-writing on the wall and continue to believe that short sales will be a major factor - especially in Las Vegas. That is why I teamed up with Las Vegas trainer Steve Kitnick to conduct the Certified Short Sale Professional designation Course. Our first class sold out and we certified 49 Realtors. Our second class is also sold out - May 20th. We have scheduled two more course dates in June - 5 & 20. To get all the details and register, just visit www.NevadaCE.com.
Our goal is to educate and certify as many real estate agents as possible in order to help more homeowners avoid foreclosure and to stimulate our local economy with increased sales and movement of the inventory.
