Some changes are coming according to Fannie Mae and Freddie Mac. Beginning on June 15, loans backed by Fannie or Freddie should expect to have a decision on a short sale offer within 30 to 60 days. If 30 days or more are needed, servicers must provide the borrower with weekly updates and must come to a decision within 60 days from when they received the offer.
The Government Sponsored Enterprise (GSE) issued new guidelines last Tuesday, which fall under the Servicing Alignment Initiative, which rolled out last fall. This was aimed to bring greater transparency to the short sale process and expedite decisions related to the pre-foreclosure sales.
The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.
Edward DeMarco, acting director of the FHFA, says the GSE’s new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”
GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner. The Government Sponsored Enterprise (GSE) plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.
Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.
Bank of America says, it's also making changes to its short-sale procedures which will shorten decision times on short sale offers to 20 days, down from 45 days or longer.
Look forward to next week.
If you have any questions or concerns please contact me at: firstname.lastname@example.org. Diane is the President of the Lodi Association of Realtors.