Finally, new rules for banks? Short selling will be easier!

The following changes are valid in California through the end of 2012 on mortgages originated in 2003-2007 that are owner-occupied, 1-4 unit properties:
The homeowner is allowed 30 additional days before the lender/servicer may file a NOD, if the homeowner has accepted bank initiated contact to discuss options either personally or by a third party representative (i.e. the homeowner's agent).
The lender/servicer must, at a minimum, attempt or offer to assist the homeowner in the following ways:
Once by first class mail, informing the homeowner of the 800# for a HUD certified counseling agency
3 times by phone at 3 different times of the day and on three different days to the homeowners primary phone number listed on their account
Two weeks after 3rd phone attempt, certified letter with return receipt requested and lender/servicer shall provide a 800# with access to a live rep during biz hours
Prominent link on lender/servicer's website with: a) options/alternatives to foreclsoing, b) a list of financial documents to have ready when calling the lender/servicer and c) a toll free phone number to contact the lender/servicer as well a d) toll free HUD-certifid counseling agency
The lender/servicer is exempt from fulfilling some of these conditions above if the homeowner has a) surrendered the property (vacated and sent keys to lender/servicer), b) has contracted with a company who's sole purpose is to extend the foreclosure process or c) if the property is included in a bankruptcy.
After initial contact with a homeowner, a lender/servicer must schedule a follow-up meeting call to occur within 14 days to further discuss their options.
Lenders/servicers must now revise their declaration filed with the NOD to state if the bank has communicated with homeowner or if they have been unsuccessful in their attempts to contact them.
The bank must allow a minimum of 20 days between filing a NOTS and executing a foreclosure/trustee sale.
The changes also demand the lender/servicer offer a loan modification to homeowners if by the Net Present Value test the loan mod is a better option than short sale or foreclosure. This is to ensure the best resolution not only for the homeowner, but for the investor/benificiay that the lender/sericer represents.
Additional verbiage has been added to inform homeowners and renters that they will soon be evicted as well that renters have 60+ days after foreclosure if the new owners decide to evict them and that they should seek legal counsel in this matter.
Additional required notice sent to last known address of owner 30 days after NOD to remind them they will lose their property if they do nothing.
The following is to be in effect through 2013:
If a short sale request is submitted prior to a NOTS being filed, the short sale lender must respond with a written approval or denial within 21 days.
From the time escrow or title sends in a final estimated HUD-1 for approval of closing, the lender/servicer has 4 days to respond with approval of the HUD-1 and if there is no response in 4 days, the HUD-1 is considered approved.
Homeowner or their agent can request a short pay off or copy of the deed of trust or mortgage without accruing additional costs.
The 21 days mentioned above does not start until the lender/servicer has ackowledged that they have received reasonable proof that the person requesting the short payoff demand is a) the homeowner or b) an authorized agent of the homeowner. This request, in order to be validated, if not acknowledged by the bank as received, must be sent via registered return receipt mail.
Here's 'the teeth' to this section...
The penalty for not complying with the 21 days written response is:
The lender/servicer is liable to the homeowner for "all damages" which the homeowner may sustain by reason of the refusal of the lender/servicer to produce the short payoff demand or denial and there is a $300 penalty to the lender/servicer due the homeowner. This happens each time a request is submitted and ignored or not dealt with appropriately.
My final take on this? It will help speed things up some, but the lenders aren't really getting slapped that hard for not complying and they can always play the game of "I didn't receive your file" ....so the 21 day clock doesn't start, but you now know, you have to send the file registered return receipt mail in order to 'prove' they got the file when you send it the first time.