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Breaking News: GSE Short Sales No Longer Require Default

By Elizabeth Weintraub Sacramento Broker

Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

August 22, 2012 12:00 AM

I was so excited when I heard the news yesterday that sellers don't have to be in default anymore to do a government short sale, I was jumping up and down. Thanks to my friend at Bank of America who sent me the press release from FHFA. My handyman was over at the house working on my garage roof, so I yammered on and on about it to him. Not that he probably cares but he has more to say to me than other occupants of the house, which would be meow, meow.

This is huge. HUGE. The FHFA had just announced that sellers who want to do a Fannie Mae short sale or Freddie Mac short sale no longer need to be in default. These sellers can be current on their mortgage payment. As long as they have a hardship, the bank will be given delegated authority to approve their short sale. The new guidelines go into effect on November 1, 2012.

As I was jumping up and down with glee over this short sale news, Ken Harney at the Washington Post called to talk about it. I bent his ear for a while, too. I imagine you'll see a piece soon by him online.

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Kathleen M. Feeney

Park Sterling Realty - Bronxville, NY

Mt. Kisco Real Estate - EcoBroker

fantastic news - never could understand why you had to go into de-fault first - It is about time they took care of folks that are trying to do the right thing.

Aug 22, 2012 12:07 AM

Kat Palmiotti

eXp Commercial, Referral Divison - Kalispell, MT

Helping your Montana dreams take root

That is wonderful news - thanks for sharing! (with the handyman, the cats, and us!)

Aug 22, 2012 12:29 AM

Inna Ivchenko

Barcode Properties - Encino, CA

Realtor® • GRI • HAFA • PSC Calabasas CA

Great news! Sharing, re-posting:)

I heard about it, but i still don't understand yet : what are all outdomes for such sellers.

It will become easier to get a Short Sale approval, but sellers will still damage their credits? also they talk about pursuing deficiency judgment? ( even it is up to 6k to a junior lender)

Aug 22, 2012 04:00 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

Hi Kathy: I know, it just blows me away that the government could have put people in that situation. I have a client whom Freddie Mac demanded that he had to be 90 days delinquent. 90 days!!

Hi Kat: You know me, I'd talk to the guy walking his dog across the street.

Hi Inna: Yes, there will be no deficiency, and they will pay up to $6,000 to a junior lender -- which sounds great until you realize there is no deficiency on a short sale in California anyway AND most lenders are getting up to $8,500, thanks to the June supplemental to HAFA, which sort of sets the standard expectations.

Aug 22, 2012 04:10 AM

Yeh, I know, but we had a meeting where I heard that they plan on bringing DJ into CA~hopefully not.

Btw, i visited your blog to read more details.......love your picture on a bicycle!

( I just love the whole composition and colors:) and a beautiful warm smile! )

Aug 22, 2012 04:21 AM

Mary Elizabeth Allen

Lake Monticello, VA

That's fantastic news! It never made sense to me why the government would TELL someone to default. Completely antithetical to the notion of financial responsibility. So glad they finally came around!

Aug 22, 2012 04:57 AM

Pamela Smith

Award Realty - Sun City West, AZ

Sun City West, Corte Bella, Sun City Grand

Elizabeth,

Thank you for the good news.

I hope everything turns out well with the garage!

Aug 22, 2012 08:38 AM

James Dray

Fathom Realty - Bentonville, AR

Morning Elizabeth I know if your excited it must be good news. I'll wait and see the release before I start to jump up and down.

Aug 22, 2012 09:09 PM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

That's awesome news! I honestly don't know why it was ever a requirement to be delinquent any way if someone could prove a hardship.

Aug 23, 2012 12:53 PM

Lanre-"THE REAL ESTATE FARMER" Folayan

Samson Properties - Bowie, MD

I don't make promises.I deliver results.SOLD HOMES

Elizabeth this is great news. Thank you very much for sharing this. This is worthy of a FEATURE. Have a great weekend.

Aug 24, 2012 04:09 AM

Breaking News: GSE Short Sales No Longer Require Default

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