Mr Bruce Olvin McBarnette, a real estate investor and President of Summit Connection LLC recently shared his thoughts on the new rules governing short sales that the Treasury Department announced on December 28, 2010.
A short sale is the sale of a house for less than the principal owed on the seller’s mortgage loan. Although don’t much like accepting less than the full principal owned on their mortgage loans, lenders sometime prefer to accept a short sale rather than a foreclosure which can cost more, particularly when home prices are low.
Short sales used to be very time consuming and difficult to do, since they require the cooperation of several parties, such as the lender, the lender’s mortgage servicer, the seller, the buyer, the buyer’s mortgage lender, the real estate broker and, sometimes, a second mortgage holder as well.
So, with millions of home owners in the United States facing the possibility of foreclosure, the Obama Administration instituted rules on April 5, 2010 to make short sales easier.
The rules apply to short sales administered by the Home Affordable Foreclosure Alternatives Program (HAFA) and apply to banks and other lenders participating in the government’s Home Affordable Modification Program (HAMP). The rules provide government incentive payments to lenders, borrowers, servicers, and second mortgage holders for completing short sales.
Bruce Olvin McBarnette, whose company, Summit Connection LLC, is based in Sterling, VA, said, “President Obama did a wonderful job in acting quickly to make it easier for lenders do short sales as an alternative to foreclosure, however, there were aspects of the program that needed improvement and that is the reason behind these new rules, which take effect on February 1, 2011. These rules relax the debt-to-income verification requirements and therefore make it easier for sellers to be eligible for the program.”
He said the rules also allow second mortgage holders to receive more money for approving a short sale. Approval by second mortgage holders has been one of the biggest hurdles toward doing short sales. Mr McBarnette praised the Obama administration for doing an excellent job addressing this and other needs of the US economy in difficult times.
Mr McBarnette may be reached at Summit Connection LLC (800) 777-7680 or by email at firstname.lastname@example.org
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