Ann Arbor Real Estate: Treasury Sets Short Sale Guidelines

December 3rd, 2009 Ann Arbor Real Estate Experts Posted in Ann Arbor Community, Ann Arbor Real Estate | 1 Comment »

For my Ann Arbor Short Sale Sellers, Buyers and Cooperating Realtors

TREASURY SETS SHORT SALE GUIDELINES

The US Treasury laid out guidelines for short sales under a government program on Monday, 11/30/09. This is a critical program, as it offers lenders and sellers incentives to agree to short sales under treasury guidelines. The guidelines include

Lenders/Servicers MAY NOT force or request Realtors to reduce their commissions as listed in PA (commissions are capped at 6%)
Lenders/Servicers must respond to short sale requests within 10 business days.
Lenders MUST release borrowers from all future debt.
Short sale requests may be approved prior to property listing.
Lenders must first attempt to structure a loan modification for borrower. If borrower doesn’t qualify, then the process moves to short sale.
Borrowers must agree to sign a deed in lieu of foreclosure if short sale does not consummate.

Borrowers will receive up to $1500 for moving expenses, lenders up to $1000 to defray losses on short sales. The new program, will take effect 4/5/2010, but lenders may use the program before then. It appears this program has the potential to revolutionize short sales.

Click here to review the complete guidelines and forms.

FICO REVEALS CREDIT SCORE FACTORS

For the first time, this week, FICO, the company that designed the credit scoring computer models, gave some insight into how certain events affect your credit score. These “damage” factors are summarized in table below, per FICO;

DAMAGE POINTS-HOW MISTAKES AFFECT YOUR SCORE
(please note higher scores are harder hit by negative credit events)

MISTAKE*	IF YOUR SCORE IS 680	IF YOUR SCORE IS 780
Maxed Out Credit Card	down 10-30 points	down 25-45 points
Day Late on Major Credit	down 60-80 points	down 90-110 points
Debt Settlement	down 45-60 points	down 105-125 points
Foreclosure	down 85-105 points	down 140-160 points
Bankruptcy	down 130-150 points	down 220-240 points
*Assumes mistake is recent (within 90 days). Older mistakes affect credit less, by date.

Information from Bob Yopko
FIRST EQUITY RESIDENTIAL MORTGAGE, INC.
Chelsea, Michigan 800-557-0270 734-475-0270

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