Just met and spoke with two major firms who are supposedly getting pre approved short sale programs in place. This is different from a traditional short sale in that it is initiated from the top down approach. Meaning that the bank initiates the short sale process with the homeowner. Basically when a homeowner is in trouble, missed payments or declined for a loan modification, the bank directs the homeowner to short sale their home. The Bank will give guidance to the homeowner in regards to the price that is should be listed at, promise a quick turnaround time, and hopefully forgive the home owner for the debt. Some programs also talk about giving the homeowner cash to move out and cooperate with the process. The bank wants to direct which real estate agent that the homeowner uses, so that they can pay lower commissions but at the same make sure that everything is being done in the best interest of the bank. The problem with this is that is can violate RESPA and steering laws in place because a homeowner still has the right to chose their own agent or representation to make sure that their agent is working on their own behalf and best interest. I have heard a few ways the banks are getting around this and are very interesting to say the least. It will more interesting to see how the homeowners and general public respond to this in their short sale process.
If a bank is asking you to use an agent of their choice it is always best to get a second opinion from someone that has experience with this such as myself or an attorney. If this happens to you, I always offer a free hour consultation to anyone who needs help or further information. Just give me a call Short Sale Kurt.