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It’s too soon to fairly measure the full affects of the new guidelines Fannie Mae rolled out last month but we should have started to see some improvements on the front end of the short sale process. As part of the Federal Housing Finance Agency’s Servicing Alignment Initiative, Fannie Mae has implemented new rules effective November 1st this year, intended to streamline the short sale process and help prevent foreclosures and stabilize communities.
Fundamentally the changes will significantly speed up the overall process and could eventually do away with the negative reputation short sales have earned over the past several years with homebuyers as well as the many real estate agents who have all but given up on the dreaded short sale.
Here are some of the more noteworthy changes you can expect to see during the course of your next short sale:
* Servicer’s authority to approve and complete a short sale without Fannie Mae endorsement (time savings; 30 days)
* Reduced documentation required to complete a short sale (time savings; 45 days)
* Standardized $6,000 (maximum) payout to subordinate lien holders (time savings; 60 days)
* Approval for borrowers that meet certain hardship criteria who are not currently in default of their loan (removes barriers for homeowners in danger of foreclosure)
* No hardship documentation from borrowers 90 days or more delinquent (time savings; 30 days)
* Borrowers deficiency waiver (we could see a spike in homeowners willing to consider a short sale)
* Fannie Mae Short Sale Assistance Desk (http://www.fanniemaessad.com/) (time savings; 15-30 days)
Based on over 70,000 short sales last year and geared up for just as many in 2013, it was imperative that Fannie Mae revolutionize their processes in order to facilitate the overwhelming demand to help the still millions of underwater homeowners at risk of foreclosure.
These changes are intended to avoid delays, eliminate red tape and assist in foreclosure prevention . Be a part of the cause; get back into the short sale business.
Your comments, good and bad, regarding the effectiveness of these changes are strongly encouraged. We would like to hear your opinions.