Guidelines for new short-sale rules

Saturday, March 13, 2010

The new short-sale rules

What sellers can expect from participating lenders starting in April:

-- Sellers must be unqualified for a loan modification under the Home Affordable Mortgage Program or be unable to afford the modification.

-- The bank will set an acceptable value of the home upfront, based on an appraisal or broker's price opinion.

-- Lenders must approve or deny a purchase offer within 10 days of it being submitted.

-- Once the bank approves a home for short sale, sellers may stop paying all related mortgage payments, and unpaid mortgage debt will be forgiven.

-- These mortgage payments will not be shown as late on credit reports.

-- At closing, sellers are entitled to as much as $1,500 from the government to cover relocation expenses.

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