Effective June 25th, Fannie Mae has issued new guidelines for required response times to short sale contracts. These guidelines include:
• establishing maximum required response times for short sale offers
• requiring servicers to provide periodic status updates during the negotiating process
• allowing short sale offers without first requiring HAMP loan modification
All servicers of Fannie Mae loans have to follow these requirements. But does this mean that BOA, Wells Fargo, etc. will improve their short sale process? We sure hope so!! But as a practical matter there are still several technicalities preventing an immediate improvement.
For example, the requirement to respond to a short sale contract within thirty days does not begin until a complete "package" has been received by the servicer. Everyone who has ever submitted a short sale package knows that it takes forever, with many documents sent repeatedly before the servicer will acknowledge the package is complete. Due to the time delays with the servicers, the financial data submitted becomes outdated (last two pay stubs, most recent bank statements, etc).
One interesting new requirement with non HAFA Short Sales requires the servicers to acknowledge receipt of a short sale offer within three business days. And if there is incomplete information, the servicer must provide a check list of missing documents within five business days. This could be a great improvement with the process!!!
Unfortunately, the next guideline allows the servicer thirty days to respond after receipt of a completed "package". What might happen is that the servicer may merely provide a list of missing documents, but then never admit that they have everything (thus the thirty day response requirement never starts).
PS - Unfortunately these new requirements may not result in quicker response times. I hope I am wrong. Only time will tell as we need quicker short sale approvals.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, VA 434-973-7474
Lake Monticello (Palmyra, VA) 434-589-3636