New FNME Guidelines Short Sale Processes


Social into that MastheadOverlay zoneNew Short Sale ProcessYou do not have to be late on your mortgage payment to qualify for a Short Sale!Short Sale majority leader Harry-Reid (D-NV) Please bring the legislation to a vote before Congress adjourns New short sale guidelines for Fannie Mae, Freddie Mac, will it open the door for more foreclosures or will  homeowners hope and pray their homes gain their value back?
Fannie Mae announced this week they are going to implement new short sale guidelines that would include homeowners that are current on their mortgage payments.   The new guidelines would empower lenders and servicers to quickly and easily qualify eligible borrowers for a short sale.  But the real question will the lenders and servicers have the processes to hand the potential work loads?  We know Bank of America for example currently has so many processes to handle one transaction, that there is a bottle necking effect that some short sales are not getting started or being completed.
The new short sale guidelines will go into effect Nov. 1, 2012.  The new real estate short sale guidelines will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship.   Does this mean prior to November 1st, 2012 a homeowner experiencing a hardship would be in-eligible because they are current?
FHFA Press release August 21st,
• Offer a streamlined short sale approach for borrowers most in need: To move short sales forward expeditiously for those borrowers who have missed several
mortgage payments, have low credit scores, and serious financial hardships the documentation required to demonstrate need has been reduced or eliminated.
• Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales: Common reasons for borrower hardship are death, divorce, disability, and distant employment transfer or relocation. With the program changes, services will be permitted to process short sales for borrowers with these hardships without any additional approval from Fannie Mae or Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers will now qualify for a short sale if they need to relocate more than 50 miles from their home for a job transfer or new employment opportunity.
• Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes: Servicers will evaluate borrowers for additional capacity to cover the shortfall between the outstanding loan balance and the property sales price as part of approving the short sale.
• Offer special treatment for military personnel with Permanent Change of Station (PCS) orders: Service members who are being relocated will be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.
• Consolidate existing short sales programs into a single uniform program:
Servicers will have more clear and consistent guidelines making it easier to process and execute short sales.
• Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending: The new guidance will clarify when a borrower must
submit their application and a sales offer to be considered for a short sale, so that last minute communications and negotiations are handled in a uniform and fair manner.
• Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale. Previously, second lien holders could slow down the short sale process by negotiating for higher amounts
The key to qualify for any short sale is some hardship.  Most homeowners qualify because most homeowners are experiencing “Increased housing expenses”




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