New Foreclosure Deadlines
We thought it important to share with you a recent change in many lenders’ Short Sale policies that might affect your current file with us as well as any future files.
PLEASE BE AWARE: Some lenders are requiring that short sale packages be submitted NO LESS than 37 days (or more) prior to the foreclosure sale date. If this deadline is not met, then the lenders are refusing to consider the possibility of a short sale and to postpone the sale date.
What this means to you the agent is that you need to have the seller’s full submission packet reviewed and submitted with more than 37 days to spare.
This is causing havoc for many sellers because typically many sellers do not move forward with the sale of their property until they receive a Notice of Trustee Sale (NTS). However as there is usually only 21 days between the NTS and the auction date, this does not allow enough time to request a short sale and submit the package. The bank WILL refuse to take their submission packet.
Waiting until an NTS is received leaves the homeowner no option other than going to foreclosure.
It is important to note that if a seller does decide to let their property go to foreclosure, that the process does not strip the seller of all their financial obligations and many sellers are stuck with the foreclosure PLUS find themselves with the 2nd and 3rd lenders taking them to court for judgments to levee their bank accounts and garnish their wages.
The rejection of packages and refusal to postpone sales by the lenders is growing by leaps and bounds. We rarely lose homes to foreclosure but lately it has become even harder to avoid it. This is becoming a very common theme in the 85-90 files we have in our pipeline, so we wanted to let agents know ahead of time, just in case you come across a short sale in the future. It is your duty to inform the homeowners! Many homeowners who receive a Notice of Default (NOD) don’t have the sense of urgency they need in order to avoid foreclosure. So if the sellers would like to have the ability to short sell and avoid foreclosure, you need to make them aware of this new procedure … and get the short sale submitted into the bank right away.
The end of the year is a common time for banks to decide either to continue to help sellers and allow a short sale or mark their file for liquidation and foreclosure. Don’t give them a reason not to work on your file. The days of waiting and procrastinating are long gone. The time to act is now!
P.S. If you do come across a short sale that is within the timeframe … CALL US! We can determine if your particular short sale will fall under these new guidelines … and if it does, we do have suggestions to try to avoid this from happening.