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Mortgage Rates



Short Sale Decisions In 30, Max 60 Days . . OMG Really?

May 07

filed under: Real Estate

I’m not making it up, the articles started coming out yesterday “Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days”. Really, for sure, c’mon you must be kidding.

Pardon my skepticism but we all know there have been umpteen programs to do with the housing market in the past five years that never seem to pan out or do what they are intended to do. Trust me I want to believe what I am reading, I mean to not have to wait four, five, six or more months to hear something, anything from these lender’s is music to my ears and anyone’s elses that is or will be involved in a short sale.

So here is how this is all supposed to work. The GSE’s (government sponsored enterprises), in this case Fannie Mae and Freddie Mac have some new short sale guidelines. The implementation of these guidelines go something like this:

  1. Servicers are required 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
  2. If more than (30) days are needed, the servicers must provide the borrower with weekly status updates and come to a decision no  later than 60 days from the date of the BRP or offer was received.
  3. According to the GSEs, the (30) day add-on/extension will provide some extra time for servicers to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale.  All decisions must be made within the (60) day time period.
  4. In the event a servicer makes a counteroffer, the borrower is expected to respond within (5) business days. The servicer must then respond within 10 business days of receiving the borrowers response.

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. . . hmmm, not sure we’ll see that one.

So as to eliminate any confusion these new guidelines focus on two specific situations and the time frames covered above apply to each one of these situations.

  1. It addresses the homeowner with a Fannie Mae or Freddie Mac mortgage trying to get approval for a short sale
  2. It addresses the homeowner with a Freddie Mac or Fannie Mae mortgage who has been approved for a short sale and now has an offer for his/her home.

Yes, this really is good news and now all we can hope for is that everyone, the servicers/lenders do what they are supposed to do. As usual, time will tell.



Written by Howard Harris