Freddie Mac - FHFA Announcement Of Short Sale Relief For Military Borrowers

Real Estate Agent with East Oahu Realty RS-25848

Short Sale Mortgage Relief For Military Borrowers

Fannie Mae and Freddie Mac have agreed to allow military members who are ordered to switch bases and who are still current on their mortgages to sell their homes through a short sale — one in which the homeowner sells the home for less than the outstanding mortgage amount.

The following statement was released today by Paul Mullings,  Interim Head of Single Family Business and Information Technology, Freddie Mac (OTC: FMCC):

“Freddie Mac is proud to support this important new effort to help servicemen and women when national duty requires them to sell their homes in an uncertain market.  We look forward to working with our servicers on this new short sale policy.  Together we can help ease the challenge of relocation for military families when Permanent Change of Station orders are received.”

News Facts:

  • Today’s directive from the Federal Housing Finance Agency (FHFA) means Permanent Change of Station (PCS) orders will be considered a hardship for the purpose of qualifying borrowers serving in the armed forces for a short-sale.
  • Once implemented the new policy will enable borrowers with PCS orders to sell a primary residence purchased on or before June 30, 2012 for less than the balance on their mortgages without first being in default.  Freddie Mac will also not pursue deficiency judgments or a contribution under the new policy.
  • Freddie Mac policy currently requires mortgage servicers to treat PCS orders as a hardship for a loan modification or a forbearance.
  • Freddie Mac and its servicers have helped more than 656,000 distressed borrowers avoid foreclosure since 2009, more than 116,802 of them through short sales and similar alternatives

“As FHFA Acting Director DeMarco announced today, Fannie Mae will issue guidelines to make military families that receive PCS orders eligible for short sales and deeds-in-lieu of foreclosure.  These ‘graceful exits’ allow homeowners to avoid foreclosure if an affordable monthly payment cannot be created.  Any military family with a Fannie Mae-backed loan that is having difficulty making their mortgage payments can call 877-MIL-4566 or visit for help in preventing foreclosure.

Options for Military Service Members

If you’re a service member struggling with your mortgage payment, you may qualify for a special military hardship. Additionally, military service members have protection against foreclosure for 9 months following termination of active duty. See below for details. You can also visit Army OneSource or Military OneSource.

Military Hardship may be an option if:

  • You’ve received Permanent Change of Station (PCS) orders
  • You’re in active duty service (or just left)
  • You (or your spouse) have been injured in active duty

 HAPHAP ProgramMilitaryMilitary HousingPCS

Comments (3)

Rachell Lara & A List Properties
eXp Realty / 619.316.7445 - San Diego, CA
A List Properties - San Diego Neighborhood Experts

Great info.


Jul 28, 2012 05:15 PM
Doug Bullwinkel
Envoy Mortgage,NMLS ID 6666 - Sacramento, CA
Mortgage Loan Originator NMLS #281609

Good information to have.  We need to give Veterans whatever consideration we can whenever possible.  They deserve to be in front of the line instead of in the back. 

Jul 28, 2012 06:21 PM
Frank Diaz
East Oahu Realty - Kailua, HI

Thanks for the comments. Some veterans are under the impression that a VA loan is not a FreddieMac loan when in many cases it is. When in doubt, it's best to look it up:


Jul 30, 2012 04:15 PM