Minneapolis Duplex Short Sales May Get Shorter

One of the biggest obstacles to recovery in the real estate market is the glut of short sales on the market.

See, the very term, “short sales” is something of a misnomer. For while the lender agrees to accept less than what’s owed on the sale of a home, the amount of time it takes to successfully negotiate the transaction averages two to eight months.

As a result,  many buyers avoid looking at those properties altogether. They simply haven’t got the patience.

In an effort to expedite the process, the Treasury Department announced a new program last week to “streamline” the short sale process.

Available only to home sellers who don’t have the income or debt levels necessary to qualify for the Making Homes Affordable program.

In order to qualify for the new program, the property must be the homeowner’s principle residence. He or she must have taken the loan out before January 1, 2009, and be delinquent or appear as if default is likely. Finally, the borrower’s mortgage payment for the month must be more than 31 percent of their pre-tax income.

The plan is designed to expedite agreements between lenders, buyers, sellers and Realtors.

Unfortunately, implementation of the plan may be slow. Mortgage companies don’t have to start the program until April, 2010.

Participation by lenders who hold second mortgages like home equity loans, however, is voluntary.