Note the key word in this header..."May."   I say this because to date, every government program implemented to alleviate problems for distressed homeowners has had "implementation" problems for one reason or another.   So with my skeptcism in mind, here is what the Treasury Department intends for new short sale rules beginning April 5th. 

1.  Sellers must be "unqualified" for a loan mod under the Home Affordable Mortgage Program or otherwise be unable to afford the mod. 

2.  The lender will establish the market value of the home, up front, by appraisal or BPO (broker's price opinion). 

3.  The lender MUST approve or reject a purchase offer within 10 days of it being submitted.

4.  Once the lender approves the offer (contract), sellers may stop paying all related mortgage payments.  The mortgage debt will be forgiven.   The mortgage payments will not be shown as "late" on the credit reports.

5.  At settlement, sellers may receive up to $1500 relocation expenses. 

Furthermore, the treasury department is dictating limits on what the second (junior) lienholders can receive taking the negotiations out of the equation and offering cash incentives to lenders to settle these quickly.

Why am I skeptical?  The lenders must come out of pocket for appraisals, and they aren't cheap.   It's one thing to direct a 10 day turn around on decisions, it's another to actually do it when a lender may have hundreds in the pipeline.  It's like telling me to dunk a basketball when I simply don't have the physical ability to do so. 

Please note that this isn't an absolute guarantee that you will not take a credit hit nor does it guarantee that you won't have state tax consequences. 

Hope this helps.  

Joe Gladden