Just last week, the FHFA announced some changes that will (allegedly) align guidelines for the processing of Fannie Mae and Freddie Mac short sales. The goal of these changes is to allow both lenders and servicers to more quickly and efficiently qualify borrowers for a short sale.
Here is an outline (courtesy of C.A.R. Newsline) of some of the specific changes that will take effect on November 1, 2012 (right before election day):
- 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.
You may recall that earlier this year, the FHFA announced changes made to the program in June whereby stricter timelines were established for servicers. The above changes are in addition to those changes made in June.
If you would like to learn more about Fannie Mae and Freddie Mac’s new short sale guidelines, please do not hesitate to join us for a free webinar this Thursday. In this webinar, we will discuss this specific program in more detail and we will also review all of the things currently going on in the wacky world of short sales.