Oct 31, 2012

Tip 41-2012: Short Sales - New Guidelines for Fannie and Freddie?

Fannie Mae and Freddie Mac are issuing new guidelines effective November 1, 2012, to their mortgage services. Some of these guidelines, if actually followed, will enable lenders and servicers to qualify eligible borrowers quickly and easily for Short Sales.

According to the Federal Housing Finance Agency, "These new guidelines demonstrate Fannie Mae's and Freddie Mac's commitment to enhancing and streamlining process to avoid foreclosure and stabilize communities."

These new guidelines include the following:

1.Approval of the short sale for homeowners' who are current on their mortgage provided they have an eligible hardship (death, divorce, disability or job relocations);

2.Negotiation of waiver of deficiency based on the financial circumstances of the Borrower and their ability to contribute to the shortfall;

3.Clearer and consistent guidelines for Short Sale Servicers, resulting in a single uniform program;

4.Clarification to Servicers and Borrowers regarding how to handle a short sale when a foreclosure is pending;

5.Payments of up to $6,000 to second lien holders;

6.Requirement for Servicers to respond to short sale contracts within 30 days, to provide weekly status updates after 30 days, and make a final decision within 60 days of receipt of complete short sale package.

With any luck these guidelines will allow for more successful and quicker short sales. We can only hope!!

Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions, or visit our blog below for previous tips.

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