Tuesday, November 6, 2012

New Streamlined Short Sale guidelines Fannie and Freddie Mac

According to a recent article on Housing Wire, the new streamlined short sale guidelines for Fannie Mae and Freddie Mac short sales (beginning November 1) are alleged to be a win-win.
Remember that as these new short sale guidelines aim to have a more streamlined short sale when the investor owner of the loan is either Fannie Mae or Freddie Mac.
These guidelines (information courtesy of the California Association of Realtors®):
  • Eliminate current Fannie Mae and Freddie Mac short sale programs and create a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).
  • Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac
  • Offer special treatment for military personnel with Permanent Change of Station (PCS) orders.
  • Standardize and clarify foreclosure suspensions on a property with an approved short sale.
  • May pay borrowers up to $3,000 in relocation assistance.
  • Offer up to $6,000 to subordinate lien holders to expedite a short sale.
According to information provided directly to Housing Wire from FHFA, servicers will have the authority to approve a standard short sale for borrowers who are 31 days or more delinquent and borrowers who are less than 31 days delinquent as long as they are facing a hardship.
If a borrower is less than 31 days delinquent and facing a hardship (e.g., divorce, death, disability or military change of station orders), servicers now have the authority to approve a short sale without sending the paperwork to Fannie Mae or Freddie Mac.
Just as we have seen with previous short sale programs, this streamlined program will only be as good as the bank employees that process the short sale packages.
So, is this a trick or a treat? We will just have to wait and see.