The Federal Housing Finance Agency (“FIFA”), the regulatory agency governing Fannie Mae, Freddie Mac and the Federal Home Loan Banks, recently promulgated new guidelines to facilitate approval for eligible borrowers for a short sale. Effective November 1, existing short sale programs will be consolidated into a single program with uniform guidelines. Certain homeowners with a Fannie Mae or Freddie Mac mortgage will be able to sell their home in a short sale even if they are not in default. Servicers will be able to expedite processing of a short sale for borrowers with an eligible hardship, such as the death of a borrower or co-borrower, divorce, disability, or relocation more than 50 miles for employment purposes without additional approval from Fannie Mae or Freddie Mac. In addition, relocating military personnel will be automatically eligible for short sales. Fannie Mae and Freddie Mae will also waive the right to pursue deficiency judgments against borrowers in exchange for financial contributions by the buyer if the buyer has enough income or assets to make payments or sign a promissory note.
For a complete list of the Fannie Mae guidelines, please click here.
For a complete list of the new Freddie Mac guidelines, please click here.
Author(s): Brooke P. Dolara