REALTORS® Praise FHFA for Issuing Short Sale Approval Guidance
The National Association of REALTORS® applauds the Federal Housing Finance Agency for issuing new guidance requiring servicers of Fannie Mae and Freddie Mac loans to speed responses to short sale requests. Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie and Freddie should expect to receive a decision on a short sale offer within 30-60 days.
The GSEs issued new guidelines that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales. The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program. If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.
In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response. The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.
Massachusetts Senator Scott Brown was among the senators specifically thanked by NAR for introducing legislation to reduce delays in approving short sale transactions.