Good news for people looking at having to sell their house as a short sale in Central New Jersey. Five of the largest banks in the United States have agreed to a settlement with the attorney general on a way to make the process much faster.
As a real estate agent specializing in hard hit areas such as Middlesex and Somerset Counties, I have seen short sales in the past take over six months and some never come to an agreement with the bank. Part of my job is to put together a short sale package of materials such as pay stubs, bank statements, the seller’s job history, a hardship letter and other items requested by the bank. (Each bank has a different set of guidelines and requirements they provide me with to get the approval started.)
The highlights of the new agreement are summarized below:
Banks (and their agents) must provide sellers/borrowers with a decision about the application within 30 days after receiving a short sale package request from the homeowner.
Banks will be required to tell a seller/borrower, also within 30 days, if any documents required for the transaction are missing so they can process the short sale request.
Banks must notify a seller/borrower immediately if a deficiency payment is needed to approve the short sale. (This is often one month’s back payment for instance) If they are going to require a payment they must give an estimate of the amount that will be required to complete the sale.
Banks will be required to set up an internal division to review all short sale requests.
The penalties for non-compliance are severe. If they are found to be taking longer than 30 days for a decision on more than 10% of the requests, the fine can be as much as $1 million for a first violation and up to $5 million for a repeat violation.
MARCH 16, 2012 BY MIKE DOWNER