New rules speed up short sales

Chuck Weber - bio | email

WEST PALM BEACH, FL (WFLX) - New rules that went into effect Monday are designed to speed up short sales and help borrowers avoid foreclosure.

The short sale has become a sign of the times in real estate, but navigating a short sale is anything but easy.

Realtor Jared Dalto, of West Palm Beach, now handles short sales almost exclusively. One of his listings is a town home in the Renaissance Commons development of Boynton Beach. It's been on the market for almost two years.

"Seven offers later?" Dalto asked. There's still no sale. Dalto says in about half the cases, the mortgage holder came back with counter-offers too high. In the other half, buyers just got tired of waiting for an answer said Dalto.

"Buyers out there are very frustrated," Dalto explained, "Because the turn around time for their offer is months. For sellers, the stress of having to carry the property, is like a monkey on your back."

Under the new rules, lenders who take part in the federal foreclosure alternative program have 10 days to respond to an offer for a pre-approved short sale.

Dalto hopes the new guidelines will help. "When I start getting turn around times of 10 days or less, then, I'll believe it," said Dalto.

Another provision of the new rules is if a borrower does not qualify for a mortgage modification, the lender must allow the opportunity to do a short sale. "I hate to be cynical, but I have a feeling that it is only going to help 10 to 15 percent of the people who are in trouble."