Effective October 1, 2013, HUD announced new and favorable changes to their FHA short sale requirements for homeowners seeking to short sale their homes.
This new Streamlined Short Sale, may no longer require the borrowers seeking a short sale to submit financial information or prove a financial hardship.
The following properties will be eligible:
- Principal Residence
- Second homes
- Investment Properties
- Military Service Members
The transaction must be an Arm’s Length Transaction wherein all the parties to the transaction, including buyer, seller and realtor, are required to sign an Arm’s Length Affidavit providing under penalties of perjury that they are not related as follows:
- Seller can not list the property with or sell to anyone with whom they have a close business relationship;
- The seller and buyer can not be related either by family, blood or business.
Any violation of this is considered a federal offense and violation of federal law.
Before closing, any and all liens and judgments against the seller must be released. And this we are seeing ever so often wherein the short sale lender quickly and without thought, stops a short sale because the borrower has “judgments” or liens against them. A name examination by a title agent as myself can decipher whether the liens or judgments do in fact belong to the homeowner. “Often times, it is a common name and by merely having the borrower seller sign a Non-Identify Affidavit, and submit it to the lender, that will not halt the short sale negotiation and process. ” Jacqueline A. Salcines, Esq.
Servicers must now use a Deficit Income Test or (DIT) to determine the borrower’s financial hardship.
If qualified for a streamlined short sale, the borrower may not have to produce any financial documents or prove a financial hardship.
The appraisal or BPO is also done within 10 days and prepared for review quickly so that this too does not stall the process or approval
While the borrowers may be asked to make a cash contribution at closing, often times if the property is not the homestead of the borrower, cash Incentives to homeowners by lenders are being given.
Lastly, the FHA short sale addendum, where all parties agree that the property is an arms length transaction and there are no hidden terms or conditions in the short sale, must be signed and dated by all the parties at closing or when instructed by the lender.
If the borrower qualifies, cash incentives are offered by participating lenders including:
- Bank of America
- Chase
- Ocwen
- Wells Fargo
For negotiators of short sales, this means short waiting times, short document collection and quick approval times.
For the homeowner, this is great news in that the short sales will be approved quicker and the incentives may be given.
At the Law Offices of Jacqueline A. Salcines, PA we can qualify you, free of charge for the streamlined short sale.
We work with many investors to find qualified buyers for your home and get the short sale approved at the best price possible.
Call us today for a free consultation. Our reviews speak for themselves.
TRUST | COMMITMENT | RESULTS
LAW OFFICES OF JACQUELINE A. SALCINES, P.A.
706 S. DIXIE HIGHWAY
SECOND FLOOR
CORAL GABLES, FL 33146
TEL> 305 | 669 | 5280
Recent, significant changes in Florida’s Foreclosure law have shortened the time period in which a lender can collect a deficiency, or balance after a mortgage foreclosure or short sale. The statute of limitations period for a lender seeking a deficiency judgment on a note secured by a mortgage on a residential property, is now one year, instead of five, for a deficiency action started after July 1, 2013.
