Sarasota Real Estate Market News

FHFA issues new short sale guidelines

WASHINGTON – Aug. 22, 2012 – The Federal Housing Finance Agency (FHFA) announced that short sales on homes under Fannie Mae and Freddie Mac would get easier after Nov. 1, 2012. It issued new guidelines that help homeowners hit by a financial hardship, moved by the military or held back by a home’s second mortgage.

“The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job,” says FHFA Acting Director Edward J. DeMarco.

“We hope these new guidelines will allow many more hardworking American homeowners that would have previously been denied a short sale to now be approved and avoid defaulting on their mortgage loan,” says NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami.

Details

• Mortgage servicers get greater authority to approve short sales for borrowers who are not delinquent but facing a financial hardship: divorce, family death, long-term or permanent disability or employment transfers to different parts of the country.

• Borrowers facing one of the approved hardships don’t have to be delinquent.

• Service members with Permanent Change of Station orders have greater flexibility, including the elimination of back-end debt-to-income ratios or a cash contribution promissory note.

• Fannie Mae and Freddie Mac won’t pursue deficiency judgments in exchange for a financial contribution if a borrower has enough income or assets to make a cash contribution or sign a promissory note. Servicers will evaluate borrowers’ as part of the short sale approval process.

• FHFA will give servicers more consistent guidelines to process and execute short sales and consolidate existing short sales programs into a single uniform program

• FHFA also says it will try to avoid problems when a short sale takes place during a foreclosure by issuing new guidelines.

• Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale. Previously, second lien holders could slow down a short sale by negotiating for higher amounts.

For more information, visit http://www.realtor.org/topics/short-sales.

© 2012 Florida Realtors®

October 23, 2012 - Posted by | News related to Short Sales and Foreclosures

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