Finally, some light at the end of the short sale tunnel . Giant Secondary Mortgage market players Fannie Mae and Freddie Mac have new guidelines for helping borrowers and lenders get through the process of selling short. A short sale, as you know, occurs when borrowers become unable to sell their houses for enough money to satisfy the lender or lenders. The short sale phenomenon was powered by people borrowing at the top of the market and using loan programs that became unsustainable for them. The difficult real estate market decreased borrowers equity and often caused them to lose jobs or have reduced income. In a move to get those bad loans off of their books, lenders began approving short sales. The process was dreadful, the lenders understaffed, and many of the transactions failed.
Fast forward several years and the lenders really are refining the process. Here is a great article by Charlottesville attorney Bill Tucker. The loans packaged and sold by loan originators to Fannie Mae and Freddie Mac are under control of them as they are being sold short. Below is Tucker’s Tip.
Advice for Realtors and Lenders
Tip 41-2012: Short Sales – New Guidelines for Fannie and Freddie?
Fannie Mae and Freddie Mac are issuing new guidelines effective November 1, 2012, to their mortgage services. Some of these guidelines, if actually followed, will enable lenders and servicers to qualify eligible borrowers quickly and easily for Short Sales.
According to the Federal Housing Finance Agency, “These new guidelines demonstrate Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining process to avoid foreclosure and stabilize communities.”
These new guidelines include the following:
With any luck these guidelines will allow for more successful and quicker short sales. We can only hope!!
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions, or visit our blog below for previous tips. Thank you for allowing us to send you this email.
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William D. Tucker, III
Charlottesville, VA 434-973-7474 | Lake Monticello (Palmyra, VA) 434-589-3636