Freddie Mac and Short Sales

Freddie Reallocates More Funds to Boost Short Sales

Daily Real Estate News | Tuesday, April 24, 2012

Money used for a federal program aimed at helping 18 hard-hit housing market states can now reallocate its funds to help home owners complete short sales or other foreclosure alternatives, Freddie Mac announced Monday to mortgage servicers.
Mortgage giant Freddie Mac, along with Fannie Mae, has recently placed more focus on helping home owners complete short sales to avoid foreclosure. (Read more: Fannie, Freddie Speed Up Short Sales)
The Hardest Hit Fund reportedly has been an underused program by 18 states and the District of Columbia. The program is to provide home owner assistance to states through loan modifications, short sales, unemployment assistance, and mortgage principal reduction. But only 3 percent of the funds for the $7.6 billion program has been used as of Dec. 31.
Some of that money can now be allocated to helping more distressed home owners, including borrowers for short sales, deed-in-lieu of foreclosure, or relocation assistance, according to Freddie Mac.
Source: “Freddie Directs Servicers to use Hardest Hit Fund in Short Sales,” HousingWire (April 23, 2012)

Low-ball Offers a Thing of the Past?

 

Daily Real Estate News | Tuesday, April 24, 2012

Last year, 10 percent of REALTORS® complained about receiving low-ball offers on listed homes — offers usually submitted by the buyer for 25 percent or more below the list price, according to a National Association of REALTORS® survey of its members. But that number has dropped drastically.
According to a survey this March of 4,500 agents and brokers, no REALTORS® complained about low-ball offers. The main problem nowadays: The sudden drop in inventory of for-sale homes has led to fewer homes available to sell.
For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price, the Los Angeles Times reports.
West Neal with Prudential Olympia in Olympia, Wash., recalls a buyer who came in recently with an offer of $150,000 for a home listed at $250,000. Eventually, they negotiated a final sales price of $230,000, but it took a lot of negotiating on the agents’ parts to get the buyer higher.
"Low-ball offers are down a lot because we're seeing more homes come on the market that are more realistically priced," Neal told the Los Angeles Times.
Source: “Low-ball Offers Decline in Some Housing Markets,” Los Angeles Times (April 22, 2012)

Freddie Mac sets new short sale timelines, Fannie to follow

Freddie Mac sets new short sale timelines, Fannie to follow

Freddie Mac, the federally owned company that buys mortgages from local lenders, says it wants to make the short sale process easier on home sellers by updating its timelines for short sales and requiring better communication from lenders. Last year, Freddie Mac completed 45,623 short sales.

The initiative is part of the Servicing Alignment Initiative (SAI) Freddie Mac and Fannie Mae launched in 2011 at the direction of their regulator, the Federal Housing Finance Agency (FHFA). Yesterday, FHFA announced that Fannie Mae and Freddie Mac must adopt the new short-sale guidelines, and the latter announced compliance shortly after that.

“Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short sales under the Obama Administration’s HAFA program or Freddie Mac’s traditional short-sale option,” says Tracy Mooney, Freddie Mac senior vice president, single-family servicing.

Freddie Mac proposals

• Loan servicers should make a decision within 30 days of receiving 1) an offer on a property under Freddie Mac’s traditional short sale program or 2) a completed Borrower Response Package (BRP) requesting consideration for a short sale under HAFA or Freddie Mac’s traditional short sale program. BRPs are standardized assistance applications developed under the Servicing Alignment Initiative.

• If a lender needs more than 30 days, it must give homeowners a status update at least weekly, and a final decision must be made in less than 60 days.

• If a servicer makes a counteroffer, the borrower must respond within five business days. The servicer then has 10 more business days to respond to the buyer.

Freddie Mac says it will use the new timelines to evaluate servicer compliance with the SAI and its own servicing requirements.

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