Short sales still comprise parts of the Charlottesville area real estate market; in some segments they are a greater percentage, in others they are nearly nonexistent. I’m sharing this information with you so that you can be as well informed as possible. Short sales remain an adventure – for buyers, sellers and their Realtors – and hopefully this settlement signals some progress.*

You may have heard about the $25 billion mortgage settlement … for a look at some of the critical numbers in the settlement, ProPublica has a great breakdown, including:

60-200: documents signed daily by different individual loan processors working for Bank of America, according to the government audit.

12-18 inches: height of the stacks of documents one Bank of America employee signed “without a review.”

$1 million: fine to be levied on the banks for each violation of the terms of the overall settlement, escalating to $5 million for repeat violations. (Exactly how fines will be tallied is still unclear.)

But did you know that the settlement ostensibly makes short sales, often the bane of existence who are fans of things happening in a timely fashion, logic, reason and accountability … better?

The NAR put together these takeaways from the mortgage settlement. As Sarah says, these may become helpful reality or they might be representative of another shiny unicorn that does nothing other than frustrate us — these are only for the top 5 banks, not all of the servicers, of which there are many.

1. Short Sale Timeline. The settlement contains short sale standards that are similar to the Treasury Department’s Home Affordable Foreclosure Alternative, or HAFA, program. A number of these standards will improve the short sale process including making short sale requirements publicly available, development of co-op programs to evaluate short sales prior to marketing the home, and the implementation of a 30-day response requirement after receipt of all required information and third party consents.

2. No Dual Tracking. As part of the settlement, the five servicers will no longer be able to proceed with a foreclosure sale if a short sale or deed-in-lieu of foreclosure has been approved by all parties (first lien investor, junior lien holder, and mortgage insurer, as applicable) and proof of funds or financing has been provided to the servicer. Servicers will also face strict foreclosure referral guidelines if borrowers have requested a loan modification.

3. Single Point of Contact. NAR has long called on servicers to establish a single point of contact for borrowers. This provision will not only assist in maintaining consistency and coordination of loss mitigation options, but will reduce the amount of time agents and brokers spend discussing individual short sale files with new negotiators.

4. Establishment of Loan Portal. Though processes have recently improved, many members report that lost documents requiring multiple submissions continue to cause delays. The five servicers have agreed to consolidate information for borrowers by developing online loan portals that will provide borrowers with access to information, eligibility factors for loss mitigation programs, and inform borrowers of required documentation that is missing.

5. Strong Enforcement Mechanism. The success of a number of well-intentioned programs has been hampered by voluntary servicer participation and a seemingly lack of compliance oversight. The five national banks party to the settlement will be required to regularly report compliance to an independent, outside monitor that reports to state attorneys general. State attorneys general and the U.S. Department of Justice can seek redress if the banks don’t follow the settlement terms.

Sarah Stelmok in Fredericksburg’s excellent post on the new short sale guidelines spurred this post.

* I doubt it.