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.
FloridaRealtors®
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.
FloridaRealtors®
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