Freddie Mac to pay $6,000 to 2nd loans for lien release and debt forgiveness - WTF
The new guidelines that go into effect on November 1, 2012 will require all 2nd lien holders to release and forgive the balance for $6,000. Yesterday I had my first short sale declined by M&T HELOC because they recoup deficiency balances so they could not approve a short sale with Freddie as the 1st lender. I believe that this is going to be a big problem. PNC, BB&T, M&T, USAA, the credit unions - they all reserve the right to pursue in recourse states. This might not be an issue in California, but in the 33 states that are recourse states, I think that this new guideline is going to force a lot of people into bankruptcy or foreclosure.
Giving them the benefit of the doubt, perhaps the policy makers are so far removed from actual negotiating that they did not realize the devastating effect that this requirement on the 2nd lender will have on short sales. What is the best way to make them aware of the consequences of this guideline?
Thanks.
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Permalink Reply by joe beauchamp on
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Oh, they know what they are doing - just like the banks' response to public complaint about short sales taking too long is to take their normal 14 day time for a buyer/seller response and demand things between 1 and 3 calendar days. So many more deals now get killed because the agent didn't respond in time, not because the buyer walked waiting for the bank. See? stats get so much better now. And now Freddie and Fannie aren't screwing over homeowners with high numbers and long delays, it is the bad 2nd loans refusing to roll over who are the bad people. So, things get to stay the same and the blame gets to shift some. (Note the speculation on this and other forums that FNMA is jacking up prices over BPO's and pushing for foreclosures because the REO stock is starting to go down - not a nice thing for a (now) federal agency to be doing to homeowners, their real investor (now) the taxpayer or the world economy, is it..)
Any change will require politicians making FNMA and Freddie liable for their responsibilities and take the bank money out of politicians campaign pockets. You see that happening any time soon?
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