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Tuesday, December 01, 2009

Treasury Guidance on Short Sales

by Calculated Risk on 12/01/2009 08:39:00 AM

UPDATE: Here is the document (pdf): Introduction of Home Affordable Foreclosure Alternatives – Short Sale and Deed-in-Lieu of Foreclosure

From Reuters: Treasury sets guidance to simplify "short sales" (ht Anthony)

Here are the basics of the Home Affordable Foreclosure Alternatives Program financial incentives for completing short sales or a deed-in-lieu transaction:

  • Borrowers would receive $1,500 from the government in relocation expenses.

  • Servicers receive $1,000 from the government.

  • Second liens holders can receive up to $3,000 of the sales proceeds for releasing their liens.

  • First lien investors can receive $1,000 from the government for signing off on payments to subordinate lien holders.

  • Borrowers must be fully released from any further liability.