Just in New Short Sale Deadlines go into effect.
As part of a settlement with 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.
Hereâ€™s a glimpse at the new new requirements for servicers under the newÂ settlement:Â
Â· Â Â Â Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.Â
Â· Â Â Â Servicerâ€™s will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.Â
Â· Â Â Â Servicers will also be required to notify a borrower if there is a deficiency payment needed before the short sale is approved, including an approximate amount.
Â· Â Â Â Servicers are also required to form an internal group to review all short sale requests.Â
Â· Â Â Â 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.Â
Chase said it completes short sales â€“ from receiving full documentation to approval â€“ in a little more than one month. (This I can agree with. As I have worked many Short Sales with Chase and Iâ€™ve been luck to get an approval in 30 days and close in 60 days.)
But under the settlement, there is some enforcement to the guidelines. (Finally)
Servicers will form internal groups that will conduct quarterly reviews and gauge compliance. When a servicer fails any servicing standard metric, including the short sale timeline, representatives must meet with a monitoring committee overseen by North Carolina Banking Commissioner Joseph Smith. The servicer will have the right to correct any potential violation by installing an action plan, according to the settlement.
Source: â€œAG Settlement Starts the Clock on Short Sales,â€ HousingWire (March 14, 2012)