Short Sales in Michigan to get Easier?

April 5, 2010 the Home Affordable Foreclosure Alternatives (HAFA) - Short Sales & Deeds-In-Lieu of Foreclosure update to HAMP kicks in.

Michigan, Mortgage, Expert, Birmingham, Bloomfield, Detroit, Rochester, Royal Oak, Troy

More help for Michigan Short Sales is on the way once this new part of the Home Affordable Modification Program (HAMP) gains traction. 

Just to show how slow government and banking bureaucracies move, this change was announced November 30, 2009.  So, it looks like it takes about 4 months for these organizations to really get their acts together and implement something like this.

The new guidelines are meant to streamline the process for Michigan Short Sales, including targeting second lenders that hold up short sales.

Seems many second lenders would rather see a property go to a foreclosure and get nothing

, than agree to take pennies on the dollar for their mortgages. 

Now, the federal government is going to basically bribe them with $1,000 or so if they'll cooperate with the short sale process.  I'm not sure how big an incentive $1,000 is if a second mortgage is say $75k.  Hopefully, the federal government implies some threats with their incentive program.

Of significant interest is how the government wants lenders to value homes for short sales - they want real estate agents to do Broker Price Opinions (BPO) to establish values. 

Who's required to list properties for short sales?  These same agents.  So, it won't be long before some agents figure out how to low-ball BPO's for quick sales & the corresponding commissions.  There will also be some collusion with real estate investors who will buy these low-balled properties and flip them for profit. 

I know a lot of agents involved with Michigan Short Sales and most of them do a great job.  I also know of several agents that I wouldn't be surprised to learn they had low-balled BPO valuations to make a quick commission.

I find this pretty ironic given all the hoopla about the Home Valuation Code of Conduct (HVCC) that was supposed to make appraisers immune from any bias on valuations.  All of a sudden the government doesn't trust HVCC and appraisers to do unbiased valuations?

Just shows that either there's collusion or incompetency in our federal government, but I'm sure that neither would surprise anyone.  

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In addition to real estate lending, consulting and investing, Drew Sygit writes & speaks about the mortgage & real estate industries.  He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor.  He's presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA's, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications.  For speaking engagements and questions he can be reached at dsygit@TheLendingEdge.com.  He also publishes his own blog:  http://DrewsMortgageNews.com & has a FaceBook FanPage: www.FaceBook.com/TheLendingEdge