Sacramento Short Sales are still the majority of real estate transactions in the market—about 65% of all sales are short, and only about 15% are foreclosures. I will update these market stats here on the front page in about 2 weeks, so check back.
In the meantime, we continue plugging away, with changes in the way Short Sales are processed happening every day. Here are some recent changes to keep an eye on. Most seem to be designed to make the Short Sale an easier process. And…well…some are just entertaining. Like Bank of America—now referring to your Short Sale as a “Debt Settlement Transaction”. Ok, that’s what it is, but really? Doesn’t B of A have anything better to do than come up with new creative terminology? Surely there is an Approval Letter they could be issuing instead.
B of A says, there are only two issues that determine short sale eligibility justified by all the other documents they collect;
- Net Proceeds
And from B of A– “Wet Signatures Only” – no more digital signatures are allowed.
As part of a settlement with CA state Attorneys General, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.
Here are some of the new requirements for servicers under the settlement:
- Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request. (This is huge! As this comes into effect more, we will see process times reduced from 120 to 30 days. No more wondering for months and months if your short sale is accepted! So excited for this.)
- Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.
- Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests. Violations can carry fines of up to $1 million and $5 million for repeat offenses.
And lastly, there are some actual incentive programs being used to help convince borrowers to do the short sale and not foreclose. Could not find any evidence of these in California, they are mostly in states where foreclosure goes through the courts—where foreclosure is very costly and incentives save money.
Chase, Bank of America and Wells are offering from $3000 to $30,000 to homeowners to short sell and move out. Maybe this will be the start of trend that will travel here to the left coast.