I have good news for homeowners that are underwater on the mortgage and need to do a short sale, or for buyers looking to buy a short sale. The Federal Housing Financing Agency just issued new guidelines to lenders that service Fannie Mae and Freddie Mac loans that are intended to “offer a streamlined short sale approach” which will be music to the ears of anyone that has been through the process. I don’t always agree with the actions of the FHFA but I think this is a good move and will help the market. The new guidelines (see below for highlights) go into effect November 1, 2012Highlights of the new guidelines for short sales:
- Borrowers that are current on their mortgage will now be eligible for a short sale if they have a qualifying hardship (this is huge, the rule before was dumb and punished you for continuing to make payments)
- The procedure for Fannie Mae loans and Freddie Mac loans are now going to be the same, making it simpler for everyone to understand.
- Offer special treatment for military personnel withPermanent Change of Station (PCS) orders.
- Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale.
Qualified hardships to be eligible for a short sale include:
- Death of a borrower or death of the primary or secondary wage earner in the household
- Unemployment
- Divorce
- Long-term disability
- Distant employment transfer/relocation (more than 50 miles one way)
- Increased housing expenses
- Disaster (natural or man-made)
- Business failure
These guidelines apply to borrowers that have a Fannie Mae or Freddie Mac loan (over 90% of all the home loans in the U.S.). To find out if your loan is a Fannie or Freddie loan you can go online or call:
- Fannie Mae
- http://www.FannieMae.com/loanlookup
- Call 800-7Fannie (8 am to 8 pm ET)
- Freddie Mac
- https://www.FreddieMac.com/corporate/
- Call 800-Freddie (8 am to 8 pm ET)
If you are a homeowner, owe more on your home than you think it is worth and would like more information on your options, please contact me by clicking here.
If you are looking to buy a short sale and would like to search all the short sales available in the St. Louis, click here.
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