Treasury aims to speed up short sales

The Treasury Department is giving lenders a new 10-day deadline for responding to short sale offers, in an attempt to move along a process that can drag on for months as banks decide whether to approve deals. The new rules stand to benefit underwater homeowners, many of whom have seen their buyers walk away in frustration amid delays, though some real estate agents have expressed doubt that the guidelines will be enforced. Lenders, for their part, are concerned that 10 days won’t be enough time to respond to offers. The new Treasury rules also provide financial incentives that encourage short sales: sellers will receive $1,500 in moving allowances and won’t be responsible for repaying their remaining debt, and lenders will receive $1,000 subsidies to cover the administrative costs for each sale. Investors that own the underwater mortgages can get as much as $1,000 for allowing up to $3,000 in short sale proceeds to be distributed to subordinated lenders. [Sun Sentinel]