On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program. Among other things, the new program:

  • Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
  • Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
  • Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
  • Will provide standardized documents, including short-sale agreements and offer acceptance letters.

The Foreclosure Alternatives Program is anticipated to launch in late July.

For more information on all the short-sales provisions included in the program, see NAR's Short Sales Incentive Summary and the government's Foreclosure Alternative Program fact sheet (PDF 44K).