Loan modifications are implemented at extremely low pace. Government reports are showing that in 2009 only 66,000 loans were permanently modified, a minimum portion of over 900,000 submitted for consideration.
Short Sales will be impacted starting April 5, 2010 when a new law goes into effect requiring lender that participate in the Home Affordable Foreclosure Alternatives (HAFA) program to have a compliant short sale plan in place. The new rules include a 10-day window to accept or reject offers and a $1,000 incentive for each closed short sale.
A major ingredient in both Loan Modification or Short Sales approvals are the BPO (Broker Price Opinion). They are use to determine the value of properties to establish a minimum offer of a short sale or loan modification.
A second ingredient is having a competitive offer and a complete, well-organized short sale document packet for the servicer. Even after submitting a perfect package we still see reluctancy with the lenders. The reason is because accounting rules allow holders to carry the loans at artificially high values, and therefore many refuse to acknowledge the losses and write down the loans not affecting their capitalization.
The market inventory will continue to run sluggish and high making it the best time to Buy. To take advantage of this market go to my web site and search for properties or email me at mbracket@hotmail.com.
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