I can't believe that Fannie Mae, operating under government conservator-ship, is telling short sale sellers to go into default. The U.S. Department of Treasury is giving Fannie Mae up to $200 billion dollars to bail it out. Yet, what we have here is the government telling short sale sellers to stop making their mortgage payments.
Fannie Mae is now rejecting short sales for sellers who are current on their payments. Flat out rejecting them. Which means sellers who hope to get short sale approval from Fannie Mae must stop making their mortgage payments. This sounds so bizarre to me. But it's happening on 2 of my Sacramento short sales. The first I thought a fluke, but on the second, Fannie Mae says being in default is its new policy in order to approve a short sale.
On the one hand, Fannie Mae guidelines clearly state that a seller who fits certain criteria, one of which is having no more than a 30-day late, may qualify to buy another home immediately. On the other hand, with this recent change in policy, Fannie Mae is making it practically impossible for a short sale seller with good credit -- a short sale seller who wants to do the responsible thing and continue paying on a mortgage -- to do a short sale and maintain that good credit.
That's because of the lengthy process to get a short sale approved. To maintain a credit rating that fits Fannie Mae guidelines to buy again immediately, a short sale would need to be completed, from start to finish, in 59 days. Many lenders take 6 to 8 weeks to process a short sale. Fannie Mae review takes another couple weeks.
Does anybody see anything wrong with this? Why would the government tell responsible home owners who are in distress to trash their credit by going into default on a mortgage? If the short sale doesn't go through because the buyer flaked out somewhere along the way, a seller's home could go to foreclosure. Why is the government adding to the flood of foreclosures?
This makes me want to tear out my hair and go running naked in the streets. Except that would just get me arrested.
Here is the link where you can go to find out if Fannie Mae holds your loan.
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.
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