New guidelines on Short Sales

I am currently representing a buyer who is purchasing a short sale property. It has been a learning experience and a pretty long process so I have been paying close attention to guidelines regarding these properties. I hope that we will be closed or close to closing by June 15; however new guidelines go into effect on that date that require all short sale properties with loans backed by Fannie Mae or Freddie Mac to receive an answer on an offer from the bank within 30-60 days.

"Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.

Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA). 

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.

According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale. All decisions must be made within 60 days.

In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response."

Read the entire article here. Courtesy dsnews.com
 

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