On August 21, 2012, the Federal Housing Finance Agency (FHFA, the conservator of Fannie Mae and Freddie Mac), announced that Fannie Mae and Freddie Mac would be issuing new guidelines to enhance and streamline the short sale process.
Servicers of Fannie and Freddie loans will be allowed to approve short sales for borrowers with severe financial hardship with limited documentation, provide borrowers who are current on their loan the option for a short sale if they face a financial hardship such as divorce, long distance employment transfer, or a severe disability, and provide valuation guidance to real estate agents early on in the short sale process. Servicers are required to implement the changes by Nov. 1, 2012.
“Realtors appreciate FHFA’s efforts to increase the number of short sale approvals, which limit the losses incurred by homeowners, lenders, the federal government and taxpayers,” said National Association of Realtors® President Moe Veissi.
NAR worked closely with FHFA and Fannie Mae and Freddie Mac to create the new guidelines and has long advocated improving the short sale process to provide more distressed homeowners with alternatives to foreclosure. NAR believes that improving short sale eligibility will allow more families to avoid foreclosure and reduce the negative impact foreclosures have on families and communities. Short sales also help stabilize home values and neighborhoods by keeping homes occupied, which benefits the housing market and aids in the recovery.
For additional details, please click here to read the FHFA summary and fact sheet.
Related links: Realtors Applaud FHFA for Expanding Short Sale Eligibility to Help More Struggling Homeowners Fannie Mae guidance available Aug. 22 Freddie Mac guidance available Aug. 21