Fannie, Freddie to streamline short sales
Late yesterday, the Federal Housing Finance Agency (FHFA) announced it has directed Fannie Mae and Freddie Mac to develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu, and deeds-for-lease in order to help more homeowners avoid foreclosure. The effort will come in stages with the first taking place this June. The new, aligned timelines include the requirement that mortgage servicers review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer.
“C.A.R. applauds the FHFA for taking this important step to streamline the short sale process so that the housing market can begin a full recovery,” said C.A.R. President LeFrancis Arnold. “We have long called for similar improvements to help ensure successful short sales and look forward to hearing about additional enhancements to further reform the process.”
The FHFA’s directive calls for servicers to:
- Review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer and a complete borrower response package;
- Provide weekly status updates to the borrower if the short sale offer is still under review after 30 calendar days;
- Make and communicate final decisions to the borrower within 60 calendar days of receipt of the offer and complete borrower response package
By the end of this year, Fannie Mae and Freddie Mac will announce additional enhancements that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.
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