Current short sales outside of the HAFA and HUD PFS program can take anywhere from 2-8 months to close and in some cases longer. As part of the state Attorney General’s multi-billion dollar settlement short sale time frames are set to decrease.
New guidelines from the settlement give mortgage servicers 30 days, from receipt of the full short sale package, to give a response or request new documents. The receipt of the short sale package is usually within 1-2 weeks of an accepted offer.
The guidelines carry fines of $1,000,000 for each violation with a cap of $5,000,000 for each file if mistakes are not cured. Also, this only applies if more than 10% of the servicer’s audited files are found to violate the guideline.
While this sounds good in theory the loophole of requesting further documentation may leave servicers with too much wiggle room. Recent pay stubs and account statements are required in most short sale “packages”. If your statement is for a previous month and a new one comes available within the 30 days time line the servicer may request it and extend their approval time frame.
As an added protection to the consumer the guideline also requires servicers to notify the borrower if a deficiency payment is required as part of the short sale settlement.
For more information on short selling your home or buying a short sale in Reno or Sparks, NV feel free to contact Ricky at (775) 750-1437 or Ricky@Resnv.com