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Fannie Mae and Freddie Mac
on the Short Sale Process

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Real Estate Short Sale Policy to Quicken the Sales Process

May 15, 2013 –Fannie Mae and Freddie Mac have included policies to quicken the process for short sales The new resources will help determine property values.

According to National Association of Realtors, short sales accounted for 9 percent of transactions during the first quarter of 2013.

The short sale process has mostly been a slow, long and frustrating experience for homebuyers and sellers

The Director of short sales at Fannie Mae, said the agency is working to expedite the short sales process.
“We are improving transparency and have created a dedicated short sales team to negotiate directly with real estate agents,” he said. “We now order a valuation as soon as an owner indicates they want a short sale, rather than waiting for an offer to be received. If there is no response to an offer from the loan servicer within 30 days, the case can be escalated. Our process is to counter every short sale offer.”

A foreclosure can be postponed if a short sales offer is received preferably at least two weeks from a scheduled foreclosure. Fannie Mae created a web-based channel to help agents escalate short sale issues and receive confirmation that the agency is actively working to get those issues resolved.

“To help estimate the values of distressed homes, the team uses appraisals, which are required for all short sales, as well as Broker Price Opinions, and data from other internal and external sources, including current listings, pending sales and sold properties”. The Fannie Mae valuation team includes 2,000 appraisers around the U.S., who have local competency and produce valuations within three weeks. Sales of comparable properties used for valuation need to be within the past 60 days.

Mortgage servicers are required respond to short sale offers within 30 to 60 days, and Fannie Mae may make a counter offer. Any payments on second loans must not exceed $6,000. If accepted, the borrower is released from any liability for the second loan and may not be required to make a contribution.

Improvement in the appraisal process is a critical point. Appraisers must have local knowledge and are required to produce accurate appraisals. Freddie Mac’s policy is similar, and many larger servicers have implemented similar programs.


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