Federal government moves to improve short sales

While the term short sale may evoke an idea in buyers and sellers that the purchase process will move quickly , this has not historically been the case. However, due to increased bank staffing, and a Department of Treasury program that is trying to speed up the process, the tides are starting to change, according to the Contra Costa Times.

The government's Home Affordable Foreclosure Alternatives program establishes streamlined rules for lenders and borrowers. It also gives the involved parties incentives to work together to avoid foreclosure, according to Bankrate.com.

In a short sale, the homeowner gets their mortgage lender to accept a price that is less than they owe on the property. The remaining balance of the loan is often forgiven, allowing the seller to alleviate themselves of the debt. This also enables the lender to get at least the majority of their loan back, according to the news source.

Short sales, unlike foreclosures, are usually closer to the actual house value, barring any work that needs to be done to the home, the paper reports.  

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