FHFA Aims to Make Short Sale Process Easier

• August 22, 2012

by Shilpi Paul

On Tuesday, the Federal Housing Finance Agency announced a streamlined short sale process, one that will make it easier for “lenders and servicers to quickly and easily qualify eligible borrowers for a short sale.” (In a short sale, the lender agrees to accept less than the full amount of the mortgage principal as payment.)

The FHFA’s new guidelines also open up the short sale option to those who are current on their payments but are facing a hardship like divorce, disability, relocation or the death of a co-borrower. Other changes included clearer guidelines that will make it easier for lenders to identify candidates. The new guidelines go into effect on November 1st.

From the press release:

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said
FHFA Acting Director Edward J. DeMarco. “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.”

The new guidelines are part of an effort by the FHFA to keep more homeowners from having to face foreclosure. Recently, the agnecy also shortened the time frame between submitting an offer and hearing back from lenders. Previously, that process could take several months; as of June 2012, lenders have to respond within 30 days.

This article originally published at http://dc.urbanturf.com/articles/blog/fhfa_aims_to_make_short_sale_process_easier/5938