The Federal Housing Finance Agency (FHFA) announced changes on August 21, 2012 that will align guidelines for Fannie Mae and Freddie Mac short sales and allow lenders and servicers to quickly and more easily qualify borrowers for a short sale.
Over the course of the past year and a half, California Association of Realtors has been working vigorously to address your concerns related to short sale transactions. As a direct result of C.A.R. efforts, significant improvements have been mades through discussions with legislators, housing regulators, and lenders.
Here are some specific changes that are effective Nov. 1, 2012:
• Eliminates current Fannie Mae and Freddie Mac short sale programs and creates a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).
• Enables 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
• Offers special treatment for military personnel with Permanent Change of Station (PCS) orders.
• Standardizes and clarifies foreclosure suspensions on a property with an approved short sale.
• May pay borrowers up to $3,000 in relocation assistance.
• Fannie Mae and Freddie Mac will offer up to $6,000 to subordinate lien holders to expedite a short sale.
Additionally, FHFA clarified that a borrower experiencing a hardship must wait at least two years before becoming eligible for a Fannie Mae or Freddie Mac loan.
These changes follow FHFA’s announcement in June that established strict timelines for servicers to respond to short sales within 30 days of receipt of a short sale offer, provide weekly status updates to the borrower, and communicate a final decision to the borrower within 60 days of receipt of the offer.
For details of Fannie Mae’s new short sale guidelines.
For details of Freddie Mac’s new short sale guidelines.