The one year extension of the Mortgage Debt Relief Act of 2007, which ensures that homeowners will not be taxed on debt forgiveness, coupled with the $20 billion National Mortgage Servicing Settlement , which encourages the servicers to approve short sales, look at 2013 to be the Year of the Short Sale.  To avoid delays in closing those short sales, follow these  10 tips to Avoid Short Sale Delays.

  1. Determine if property loan is – Fannie Mae or Freddie Mac . To find out if mortgage is with Fannie or Freddie:
  1. Have Seller contact their lender and find out the lender’s current requirements for short sale acceptance (varies from lender to lender; investor to investor).  Lender should promptly send out a short sale package.
  2. Verify how many loans (mortage, HELOC, etc) are secured by the property.
  3. List property in MLS.
  4. Verify if property is or is not in an HOA – Start working with the HOA as soon as possible if there are outstanding liens and/or any possible liens on property.
  5. Order/Request closer to order preliminary title report and tax report.
  6. When submitting offers to the lender, be sure buyers are aware the response time will be longer than with a conventional sale.
  7. Set appropriate expectations with buyers and sellers so that they understand the additional time a short sale can take.
  8. Be sure to submit complete packages to the lender.   Incomplete packages will delay the approval process.
  9. These situations may cause closing delays, or even cancellation by the lender:
    1. Change in buyer or agent during the process
    2. Seller files bankruptcy
    3. Inspection or Appraisal issues
    4. Request for changes after the approval letter is issued