FHFA nudges Fannie Mae and Freddie Mac into action on short sales
O.K. So, the new Short Sale regs are better than a sharp stick in the eye!! So what??
HA! There are so many loopholes in these new "regs" that an
elephant could l
eap through them.
Show me a normal transaction where the seller didn't respond to an offer to buy within 30 days and I'll show you a home that didn't sell.
This is just more smoke and mirrors designed by entities who have no real estate transaction experience.
The frustration imposed on consumers and listing agents and buyer's agents resembles the infamous "water torture" process.
Experienced real estate practitioners know GOOD PRACTICES and these new short sale "regulations" are NOT good practices.
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If there ever was a nightmare for Realtors in the last few years in the housing market it was the short sale. The psychology profession is still compiling data on how many man hours of sleep per night they lose during each short sale adventure but when the official figure comes out sometime soon it must be several. It has been that bad. The current real estate recession made the short sale famous, the talk of the micro brew pub crowd. It can take months for a real estate agent to navigate one of them through all the different-size hoops the nation’s mortgage lenders have created. Because of its long and unpredictable time frame and sheer complexity many Realtors have steered clear of them.
Some real estate agents may now reconsider taking on short sales thanks to an upcoming policy change from Fannie Mae and Freddie Mac.
FHFA – Federal Housing Finance Agency – had a friendly talk with Fannie Mae and Freddie Mac the other day and cajoled them into setting up firm short sale response time guidelines for mortgage servicers managing their home loans. Under the new GSE program the servicers must respond within 30 days either from getting a purchase offer based on their present short sale practice or a signed BRP – Borrower Response Package – seeking a short sale review. If for some out-of-body reason the mortgage servicer cannot come to a decision in 30 days, the deadline can be extended to 60 days, but now updates must be provided the mortgage borrower every week.
Fannie Mae and Freddie Mac understand that at times getting a BPO – Broker Price Opinion – or an okay from a private mortgage insurer to proceed with the short sale can take extra time and that’s why they allow the additional 30 days. However, the backstop is 60 days, firm. Let’s say the home loan servicer makes a counter offer. Now the mortgage borrower has five business days to answer to that, to which the mortgage lender then shall respond in ten business days, according to the Fannie Mae and Freddie Mac plan. Fair enough.
These guidelines go into effect June 15, 2012, giving the mortgage servicers plenty of time to streamline their operations.
The real estate market is as we speak making some progress in climbing out of the abyss in many areas across the land and this development undertaken by the FHFA through Fannie Mae and Freddie Mac should push things further along in the right direction. States like Nevada – Las Vegas especially - California, Florida and Arizona where housing markets really took it to the chin during the downturn ought to feel its positive impact the most. The thing is, a host of real estate agents would’ve liked to see this being done a few years ago. Well, like they say; better late than never.
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Provided by:
Esko Kiuru
Mortgage and real estate market commentatorwww.BluefoxToday.com - syndicated mortgage and real estate blog
eskokiuru@gmail.com
My cell: 702-499-1006
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