Is Bank of America making a false statement about FHLMC and redemption short sales?

I just received a very disturbing email that originated from BoA to my title company to me. The email reads: 

FHLMC Prohibits Short Sales During Redemption Periods   3.22.2012

 FHLMC has made a change to their policy, effective immediately, that prohibits short sales in a redemption period.  Once a property has gone to foreclosure sale, servicers are no longer allowed to accept a short sale request and must decline all short sale requests in process. 

 

Thank you. 

Short Sales/ DIL Specialist

Short Sale Department

Bank of America Home Loans®

I removed the name of the sender because I am unsure of the rules surrounding this. I believe that this is a false statement made by someone that either doesn't understand the process or they were referring to HAFA. I also seem to recall seeing something like this several months back. I am not working on this file directly so I can not give any further information. My concern that if this is a true statement, then the states that allow a redemption are going to have some serious changes to how they do business. I am in Michigan and a good portion of short sales here are after the sheriff sale. If anyone has any insight it would be appreciated.

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Permalink Reply by Kevin - Greenville, SC on March 26, 2012 at 4:26pm

I heard another Agent bring this up the other day about properties in Minnesota.  I'm not sure if that came from a Servicer or Freddie Mac directly.

I would advise you may want to have your Congressman address the issue and/or the FHFA.  I wouldn't be surprised if FNMA follows.

However, I have yet to be able to find any FHLMC Bulletin that addresses this issue.

Permalink Reply by Christopher Keels on March 27, 2012 at 7:11am

According to my research, Freddie Mac has disallowed any short sales to continue on properties that are in the redemption period. This is to include loans that are already approved. So this is in fact a true statement by Bank of America. I am interested to see how this affects the industry. 

Permalink Reply by Kevin - Greenville, SC on March 27, 2012 at 10:34am

According to a blog I've read, the GSE's said the same thing about a year or more ago.

Permalink Reply by Barbara Rodriguez on March 28, 2012 at 8:51am

Does anyone have a copy of this e-mail that B of A sent?

Permalink Reply by Christopher Keels on March 28, 2012 at 8:56am

Here is some more correspondance that I have since received.

“I do not know the reason behind this ruling.  We were given the instruction yesterday to decline all files that were in the redemption period and only the ones that have already been approved and are in the closing stages would continue the process.  If you have any further questions you should contact Freddie Mac”.

 

“Yesterday we received updated guidelines from Freddie to close all files in a redemption period if the FCL has already taken place.  In this case the FCL occurred on  1/12/12 so the file was closed.  We are sorry for any inconvenience but if you would like to verify this information kindly contact Freddie”.

 

“Freddie Mac is no longer reviewing offers on redemption properties.  I would advise you or the seller or both of you to call Freddie Mac to voice your concerns over this issue”.

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