Short Sales Being Streamlined by Treasury Department

Details have been released of the U.S. Treasury Departments Home Affordable Foreclosure Alternatives Program that gives incentives to both lenders and borrowers when negotiating a short sale or deed-in-lieu to avoid foreclosure. The program requires that all servicers currently participating in the Home Affordable Modification Program (HAMP) are also required to participate in the Home Affordable Foreclosure Alternatives Program.Under the new program servicers can receive up to $1,000 for a successful short sale or deed-in-lieu. Borrowers may be able to receive up to $1,500 for relocation purposes. Junior lien holders, also known as second mortgages, may receive up to $1,000 from the U.S. Treasury Department through matching $1 for every $2 paid by the investors.We may see that the short sale process is shortened by these new guidelines. With the shorter time period being anticipated and more available buyers due to home values and credit incentives, we may see that the housing economy will keep heading in an upward direction.