Feds Issue "Guidance" To Speed Up Short Sales, Other Loan Mod Efforts In Effort To Tamp Down Foreclosures

Reuters reports:

• The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.

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• Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt. It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings. In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.

For the story, see Treasury sets guidance to simplify "short sales."

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on the story.