On Tuesday, August 21, 2012, the Federal Housing Finance Agency announced in a news release that Fanny Mae and Freddie Mac are issuing new guidelines that will make the short sale process easier and quicker. The news release states that the "streamlined program rules will enable lenders and servicers to quickly and easily qualify eligible borrowers for a short sale." This is great news for everyone, especially sellers, buyers and realtors.
Some of the new guidelines include:
(1) A streamlined system for borrowers most in need – the documentation required to demonstrate the need has been reduced or eliminated.
(2) Enable borrowers who are current on their mortgages to easily qualify for a short sale if they receive a job transfer or new employment that requires relocation more than 50 miles away.
(3) Borrowers able to make financial contributions or sign promissory notes will be able to avoid deficiency judgments.
(4) Service members become automatically eligible for short sales if they receive Permanent Change of Station orders.
(5) Existing short sale programs will be consolidated into a uniform program.
(6) A uniform and fair standard for evaluating a sales offer.
(7) Second lien holders will receive up to $6,000 from Fannie Mae or Freddie Mac to expedite a short sale.
Short sales are on the rise and have become a common scenario for sellers and buyers. Unfortunately, many potential buyers avoid short sales because delays and uncertainty. The new guidelines will likely attract buyers and make the short sale process easier for all parties involved. It is important to contact a real estate attorney who understands the process and will guide you in selling or buying a short sale.