Help for Short Sale Process

The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.

The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer

will be limited to one extension of no more than 21 days.

The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.

According to a release from Short Sale New England, short sale homes do not bring down neighboring home values like foreclosed homes do, and 83 percent of short sale buyers are satisfied with their purchase, according to a 2012 Home Ownership Satisfaction Survey conducted by HomeGain.

“The current short sale process can be time consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a homeowner from foreclosure,” said Moe Veissi, president of the National Association of Realtors. “As the leading advocate for homeownership, realtors are supportive of any effort to improve the process for approving short sales.”

Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”

The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.

When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process.

In April 2011, a similar bill was introduced by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey), but this version requested a response deadline of 45 days instead of 75 from lenders. The legislation never came up for debate before a House committee.

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Independent Foreclosure Review Deadlines

Consumers who want their foreclosure cases checked by a third party as part of federal regulators’ independent foreclosure review directive now have until July 31, 2012, to submit their requests.

The Federal Reserve and the Office of the Comptroller of the Currency (OCC) announced Wednesday that the deadline has been pushed out by three months to give consumers more time to file for a case assessment if they believe they suffered financial injury as a result of errors in foreclosure actions in 2009 or 2010. The original deadline was April 30.

The independent foreclosure reviews, as mandated and enforced by the federal regulatory agencies, only apply to the mortgage servicers and their subsidiaries that were subject to the enforcement actions handed down by the OCC and Fed on April 13th of last year.

Participating servicers include:

  • America’s Servicing Company
  • Aurora Loan Services
  • BAC Home Loans Servicing
  • Bank of America
  • Beneficial
  • Chase
  • Citibank
  • CitiFinancial
  • CitiMortgage
  • Countrywide
  • EMC
  • Everbank/Everhome Mortgage Company
  • Financial Freedom
  • GMAC Mortgage
  • HFC
  • HSBC
  • IndyMac Mortgage Services
  • MetLife Bank
  • National City Mortgage
  • PNC Mortgage
  • Sovereign Bank
  • U.S. Bank
  • Wachovia Mortgage
  • Washington Mutual
  • Wells Fargo
  • Wilshire Credit Corporation

Borrowers are eligible for a foreclosure review if their loan is serviced by one of the participating companies above, the mortgage loan was subject to foreclosure between January 1, 2009 and December 31, 2010, and the property securing the mortgage was the borrower’s primary residence.

There are no costs associated with the foreclosure reviews. These case evaluations performed by independent third parties began in November. Eligible borrowers should have received a letter by the end of 2011 detailing the process.

Mortgage News February 17, 2012

The average 30-year fixed-rate mortgage is still at an all-time low of 3.87 percent, and it’s been there since the first week of February, according to the Primary Mortgage Market Survey released by Freddie Mac.

The 30-year average has also managed to remain below 4 percent for the past 11 weeks, and below 5 percent for the past 52 weeks dating back to February 17, 2011, according to the survey.

The 15-year rate this week averaged at 3.16 percent (0.8 point), maintaining the same average as last week. The

15-year rate averaged 4.27 percent a year ago at this time.

The 5-year adjustable-rate mortgage (ARM) averaged 2.82 percent this week (0.8 point), down from last week when it averaged 2.83 percent, and down a year ago when it averaged 3.87 percent.

The 1-year ARM averaged 2.84 percent this week (0.6 point), an increase compared to 2.78 percent last week. The 1-year ARM averaged 3.39 percent at this time last year.

Frank Nothaft, vice president and chief economist for Freddie Mac, said amidst mixed confidence, mortgages rates were unchanged.

“Small business confidence ticked up slightly in January, representing a fourth consecutive month gain, according to the National Federation of Independent Business index. However, the Reuters/University of Michigan index of consumer sentiment fell in February by more than the market consensus forecast, breaking a five month trend,” Nothaft said. “In the meantime, home builder confidence rose in February to the highest reading since May 2007, based on the NAHB/Wells Fargo Housing Market Index.”