Featured News 2012 FHFA Clarifies Short Sale Guidelines

FHFA Clarifies Short Sale Guidelines

When you chose to short sale your home, there are a variety of guidelines you need to keep in mind. Because they can be confusing and complicated, Freddie Mac and Fannie Mae have issued a press release clarifying these guidelines. The Federal Housing Finance Agency (FHFA) has standardized and streamlined the short sale guidelines, and all new rules will go into action on November 1st, 2012. The biggest change to the short sale rules is that a homeowner with a Freddie Mac or Fannie Mae mortgage will now be able to sell with a short sale. The homeowners can do this even if they are not late on their mortgage. This new ruling will facilitate a lot of faster and easier short sale house sales.

Another new short sale guideline that will go into effect in November has to do with documents. Up until now, stacks and stacks of paperwork have kept the short sale process from being all that short. Now, the FHFA has decided that they will allow those that are in the most need or are the farthest behind on their mortgages to bypass some paperwork and reduce the sections required on other documents. This can expedite the short sale process and help these people to get out of ruin faster than before. The news release says that those who have low credit scores and serious financial hardships will be able to qualify for this faster process.

Another new guideline says that servicers can now qualify some borrowers in a fast manner. This will be a possibility even If the borrowers aren’t delinquent for certain hardships. Formerly, servicers could sometimes expedite the qualifying process if the borrower was slow on payments because of a tragic death in the family, a sudden divorce, or injury or disability. Now, the FHFA will be broadening the reasons for a quicker qualification, which will allow more families in need to qualify for a short sale if it will be more beneficial to them then selling their house another way. Borrowers who need to move more than 50 miles away from their current resident because of a job will also be allowed to qualify for this quicker short sale process.

As well, the new guidelines will waive the right to pursue deficiency if the homeowner can make a financial contribution. Deficiency judgments normally make it so that a borrower must assume personal liability for any unpaid debt. Waiving this will help people to get back on their feet without having to pay an exorbitant amount of money. The new guidelines facilitate special treatment for military personnel. This means that those who have served in the military for some and have fallen into financial and real estate trouble will be given extra benefits in the short sale process. If you are a military member or an ex-military member, then keep this in mind when you choose how to sell your home.

As well, the new guidelines offer up to $6,000 to second lien holders to expedite a short sale. Before this new decision, a second lien holder could only slow down the shot sale process by negotiating for higher amounts. The FHFA will be consolidating all existing short sale programs into a single uniform program, which will give clearer and more consistent guidelines for borrowers. The new guidelines also present a qualification for mortgage lenders. They must provide clarity when they are processing a short sale, especially when a foreclosure sale is pending. This means that they will need to clarify when a borrower must submit their application so that they can be organized and avoid last minute conversations regarding the real estate. If you want more information about the new guidelines for short sales, click here. It is important to keep current on the guidelines issued by the FHFA in order to secure safe and successful real estate transactions.

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