One of the biggest issues brought up in our recent Housing Policy Forum was how long banks take to process short-sale requests. Thanks to the robo-signing settlement, though, mortgage servicers will have to follow a set of guidelines that should speed the process.
If a borrower makes a short-sale request to his
lender servicer, that servicer has 30 days to give a decision, or to notify the borrower that some documentation is missing or that he needs to make a deficiency payment (and about how much).
In other words, if you ask a bank up front what documentation is needed, your client can have a decision within 30 days of filing for a short sale.
That’s the theory, anyway. While banks run the risk of a million-dollar penalty for non-compliance, the standard they’re being held to is rather loose. As HousingWire put it, “if a servicer takes longer than 30 days on more than 10% of the requests, the firm is considered in ‘potential violation’.”
So they run the risk of being in “potential violation.” It’s something, at least.