New Short Sale Guidelines To Help Homeowners

Earlier this week the Federal regulators who oversee Fannie Mae and Freddie Mac passed some changes to the laws that govern short sales that go into effect on November 1, 2012. The design behind these changes was to help families who truly deserved of a short sale get through the process quicker and with less paperwork. Anyone familiar with a short sale knows the amount of paperwork involved in it can be extensive. I often joke with sellers when they ask me how much paperwork is involved that by the time we are done we will have used a complete tree. And that process takes months to get done. Now, the guidelines implemented for Fannie Mae and Freddie Mac are designed to help streamline this process and make it easier for deserving families to qualify and process through a short sale. Fannie Mae and Freddie Mac are primarily the investors on a majority of the mortgages out there. You would never know it because the service provider is probably the same bank that you received your mortgage with. But on most short sales Fannie Mae or Freddie mac make the majority of decisions on whether to approve or not a short sale and verify the paperwork is correct or not. Under the new guidelines borrowers who are current on their mortgages but face certain hardships like death in the family, divorce, loss of job, relocation or disability now can have their short sales streamlined faster and with less paperwork. Military personal being relocated automatically qualify for a short sale regardless of whether they are behind on the payments or not. And best of all they are exempt from deficiency judgements. So the banks cannot sue them afterwards for the balance owed on the house after the foreclosure or the short sale. the paperwork for a short sale will be uniformed among all service providers that Fannie Mae and Freddie Mac service now. Currently each bank has their own set of paperwork for the short sale and as long as it meets the guidelines for the lienholder and Fannie Mae and Freddie mac get the required information they need no one cared. However; it bogged down Fannie and Freddie as they had to sift through papers to ensure that they had all the necessary information. This eliminates this issue and should speed up the process. Also, they are offering an incentive of up to $6000 toward second lienholders to help process the short sales. Currently second lienholders can kill a short sale transaction if they do not agree to the dollar amount offered by the first lienholder or if they feel it is not in their financial best interest. With short sales on the rise as more and more banks have adopted streamlining processes in place and buyers are not waiting as long as before to close on them this can help alleviate some of the homes that go to foreclosure and remain empty for a period of a time and remove the stigma of a foreclosure off of their credit. the full article from the Federal Housing Financing Agency link is: http://www.fhfa.gov/webfiles/24211/ShortSalesPRFactFinal.pdf Dave diCecco Realtor/Broker Coldwell Banker United www.davedicecco.com