FAQ

MYTH: I'm not going to get paid through a short sale.

Simply not true. In fact the latest treasury guidelines give very specific details on the rate of commission a real estate agent can charge for a short sale. Fannie Mae and Freddie Mac have made similar statements regarding compensation for real estate professionals.

MYTH: Short sale listings are fake listings.

Tell that to the family facing foreclosure who's desperately trying to get a fresh start. The National Association of Realtors reported that one in ten homes sold in 2009 was a short sale. Most projections for 2010 will dwarf 2009 numbers. When a home forecloses, it not only affects that home but the property values of the entire neighborhood. ShortSaleSpeedway™ will help you save families from the tragedy of foreclosure but you'll be saving neighborhoods while earning more income for yourself and your family.

MYTH: Short sales don't close/take too long to close.

Short sales are like any other real estate transaction. You need a buyer and you need to do your due diligence. If you're not doing this, don't expect to close a short sale any time soon. Most short sale professionals will agree that short sales mainly fail when incomplete or improper paperwork is sent to the lender. By using ShortSaleSpeedway™ you will not have this problem, due to its user friendly and comprehensive interface.

What is a short sale?

A short sale is when a property is sold for less than the sum of all liens on the property. The lender often agrees to forgive the unpaid amount and release the borrower from any remaining obligations.

What conditions must exist for a lender/service company to consider a short sale?

The borrower must be able to demonstrate the inability to pay their mortgage and currently experience a hardship. Many servicing companies and lenders will require that the borrower first attempt to do a loan modification before they will allow a short sale.

What is a loan servicing company and what do they do?

Servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type of loan and the terms negotiated between the firm and the investor seeking their services. Their duties generally include collecting mortgage payments and crediting those payments as well sending out payment reminders establishing escrow accounts and making payments to taxes and hazard insurance companies. They are responsible for all these activities as well as loss mitigation when a loan begins to default. It is the servicer’s responsibility to report all activity back to the investor.

How can an agent be sure they will get paid or will not have the fee substantially reduced?

Real estate commissions get paid from the proceeds of the sale. The Treasury Department guidelines have set up rules to protect real estate fees in order to attract the highest quality of professional. The guidelines allow for fees up to 6%. Negotiation of fee (not in excess of 6%) is not allowed as a condition for the servicing company to accept the offer.

What is HAFA?

HAFA is a set of guidelines that were published by the Treasury Department and put into effect as of April 5 2010. HAFA is an acronym for Home Affordable Foreclosure Alternatives it sets forth guidelines by which Non GSE(Government sponsored entities) investors should process short sales. The guidelines afford several advantages relative to time lines and financial incentives to both the sellers and servicers. Since its release HAFA has been updated to make several changes to the program and it continues to evolve.

What is MARS?

MARS is a new set of rules put out by the FTC (Federal Trade Commission). Its goal is to protect consumers from unscrupulous “professionals” taking advantage of them when attempting to engage in a short sales and loan modifications. One of its main features is the Advanced Fee Ban. Under these new rules which apply to anyone offering these services, consumers are to be made aware of their rights and no upfront fees are to be collected. MARS is an acronym for MORTGAGE ASSISTANCE RELIEF SERVICES.

Why do short sales take so long to complete?

As per the new Treasury Department guidelines, once a completed proposal has been received by the servicer they have TEN days to reject or accept the offer. Closing will take place no sooner than 45 days of submission unless agreed to by the buyer. Some of the reasons why short sales take so long seem to get addressed in the guidelines by way of servicers having to respond in 10 days. The servicers also receive $1,000 incentive for a timely transaction. Other reasons for short sales taking so long have to do with incomplete submission of short sale proposals and failure to adhere to a servicers request for documents in a timely manner.

What are considered acceptable hardships for a short sale?

Hardships generally fall into 5 categories, known as the five D’s: Death: Of a borrower; Dying: sickness of a borrower affecting their ability to earn income and pay their mortgage; Destitute: an involuntary loss of income; Divorce: when one of the spouses leaves the home and if effects the household income and Disaster: earthquakes, fires, tornados and hurricanes.

What if a homeowner is current on their mortgage?

It is not necessary for a borrower to be late on their mortgage in order to engage in a short sale. What is important is being able to demonstrate the inability to pay the monthly mortgage debt. Even if the payment is being made now but documentation proves a foreseeable default, this is acceptable.

If a borrower wants to do a short sale, can the property be sold to a family member?

No! It is a requirement of the short sale agreement that the sale is an arms length transaction. This means in no way can the seller and buyer be related in family or business. The buyer will also be required to include language in the sales contract that they will not sell the property for at least 90 days and a statement affirming the arms length transaction.

Why do I need ShortSaleSpeedway™ for my short sales?

Putting together a short sale package on your own is a very time consuming task. ShortSaleSpeedway™ has all the documents prepared for you, you just need to follow the instructions, enter in the requested fields and your documents are prepared for you. How much time do I save with ShortSaleSpeedway™? If you were to prepare a short sale proposal that is comparable in quality to one produced in ShortSaleSpeedway™ on your own, it would take several hours to complete, as opposed to just a few minutes with ShortSaleSpeedway™. Make Money in Short Sales with ShortSaleSpeedway™ while helping to preserve your community.