why do short sales take a long time

If you need to sell your home for less than the, new rules governing
are designed to make the process faster and easier. The rules are part of the Treasury's Home Affordable Foreclosure Alternatives -- HAFA -- program and are aimed at speeding up lenders' decisions on short sales and. "It streamlines and shortens the short-sale process," says Kurt Gleeson, national vice president of sales for Charlotte, N. C. -based RealEstate. com. "Prior to HAFA, the time period for short sales varied greatly among lenders, and it was a very uncertain process. " A short sale, also called a preforeclosure sale, occurs when homeowners can't afford their home mortgage payments and the house is worth less than they owe on it.

The lender accepts the proceeds from the sale, even though the price doesn't cover the entire debt. The knock on short sales is they take too long. A short sale can be done only with the lender's permission, and the lender sometimes takes months to decide whether to accept the buyer's offer. Even when the delayed answer is "yes," the buyer often has given up and bought another house. Under HAFA, the lender decides upfront the minimum price it will accept.

Then, the lender and homeowner have tight deadlines to meet. Finally, the seller gets $3,000 in moving expenses for leaving the house in decent shape. HAFA is an alternative to the more desirable HAMP -- the Home Affordable Modification Program. Both programs are intended to keep borrowers in their homes and out of foreclosure. Flunks outs of a HAMP modification by missing payments; OR isn't offered a trial modification; OR rejects a loan modification offer. Lender doesn't have a non-HAMP loan modification for the homeowner.

Borrowers who qualify for HAFA and request a short sale receive a seven-page document called a "short sale agreement" from their lenders. A borrower has two weeks to respond. After responding, the borrower has four months to sell the house. At that point, the borrower and the lender operate on parallel tracks: Buyers have to offer documentation of funds or a preapproval letter from a lender with their offer for a short sale; if you're selling your house, you have to give this to your lender within three days. Lenders have to approve or deny the offer within 10 business days.

To avoid kicking the existing homeowner out to the curb, the lender can't require a closing earlier than 45 days from the date of the sales contract unless the seller gives his or her okay. If you're buying a house through a short sale, you can't sell it for another 90 days. Most people wouldn't be dreaming of selling their house so soon, but flippers, out to make a quick buck and able to screw up the market with inflated prices, would. This new rule is designed to help prevent that. Short sales through HAFA (Home Affordable Foreclosure Alternatives program) aren't allowed to involve selling the property to a friend, family member or anyone with whom you have a close personal or business relationship.

Up to $3,000 will go toward paying the junior lien holders to release their lien. No foreclosure can occur during the marketing period specified in the short sale agreement. Mortgage services can no longer charge fees to borrowers who opt for a short sale instead of a foreclosure. Nor can they lower real estate agent commissions after an offer has been received.