New Fannie Mae and Freddie Mac Guidelines for Short Sale Processing

You’ve probably heard that there is nothing short about a short sale.Well, the good news is that’s about to change.

Effective November 1, 2012, Fannie Mae and Freddie Mac are streamlining their short sale processing guidelines.

What are the new guidelines?

Here is an outline (courtesy of  C.A.R. Newsline) of some of the specific changes:

• Enables servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac
• Offers special treatment for military personnel with Permanent Change of Station (PCS) orders.
• Standardizes and clarifies foreclosure suspensions on a property with an approved short sale.
• May pay borrowers up to $3,000 in relocation assistance.

How will these guidelines impact short sale sellers?

If you have a mortgage that is owned by either Fannie Mae or Freddie Mac, then the short sale processing timeframes should improve. Additionally, you would be eligible for up to $3000 in relocation assistance.

When do I get the relocation assistance money?

Fannie Mae and Freddie Mac will offer up to $3000 in relocation assistance. This money is paid at closing. When the transaction closes and checks are cut, you will receive your relocation assistance. It will not come in the mail from Fannie Mae or Freddie Mac weeks after the closing, and it will not be paid prior to closing.

How do I know if I have a Fannie Mae of Freddie Mac loan?

Both Fannie Mae and Freddie Mac have loan lookup tools on their websites. All you need to do is enter your property address and click submit. If your loan is owned by Fannie Mae or Freddie Mac, then the phrase ‘Match Found’ will appear.

What’s in it for me if my loan is not owned by Fannie Mae or Freddie Mac?

There are many benefits to participating in a short sale transaction. You can discuss these benefits with an attorney, an accountant, or a qualified Realtor®. One of the biggest benefits to distressed borrowers whose loans are not owned by Fannie Mae and Freddie Mac is significant relocation assistance money. For example, both Bank of America and Chase Bank offer certain short sale sellers up to $30,000 in relocation assistance. And, all of the major mortgage servicers offer HAFA, the Treasury’s short sale program.