New Fannie and Freddie short sale rules begin November 1, 2012Posted by Minna Reid on Tuesday, October 23rd, 2012 at 1:11pm.
Fannie Mae and Freddie Mac have recently issued new short sale guidelines to their mortgage servicers. The intent of these new guidelines is to consolidate existing short sales programs into one standard short sale program, and streamline program rules in order to quickly and easily qualify eligible borrowers for short sales. The new guidelines take effect November 1, 2012.
A summary of the changes:
- Short sale documentation to be reduced or even eliminated for those who are behind on payments, have bad credit and serious financial hardships.
- Servicers will now be allowed to approve short sales without investor approval for those who are current on payments but face certain hardships including: death, divorce, disability, and distant employment transfer or relocation.
- Fannie Mae and Freddie Mac to waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets.
- Service members who are being relocated will be automatically eligible for short sales and will not be asked to contribute funds.
- All short sale programs are to be consolidated into a single uniform program with clear and consistent guidelines.
- Servicers and borrowers to receive clear guidance on processing a short sale when a foreclosure sale is pending.
- Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite the short sale process.
- As announced in June, servicers are still required to review and respond to short sales within 30 days of receipt of a short sale offer and communicate final decisions to the borrower within 60 days of receipt of a complete short sale package.
- These borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a short sale.
Minna Reid is a CT Licensed Real Estate Broker Associate with Keller Williams Realty, specializing in short sales, serving central CT including, but not limited to; Avon, Berlin, Bristol, Cheshire, Cromwell, Farmington, Glastonbury, Hamden, Meriden, Middlefield, Middletown, Newington, New Britain, North Branford, North Haven, Plainville, Portland, Prospect, Rocky Hill, Southington, Wallingford, West Hartford, Wethersfield and Wolcott.