Fannie Mae and Freddie Mac announced changes to their Servicing Guides aimed at helping more borrowers avoid foreclosure through short sales and deeds-in-lieu of foreclosure (DILs).
Some of the changes are to align with certain Consumer Financial Protection Bureau (CFPB) rules and regulations that implement the mortgage servicing provisions of the Dodd-Frank Act, and some are simply to ease eligibility requirements for liquidation workout options. The new GSE requirements become effective January 10, the same effective date as the CFPB’s new mortgage servicing standards.
Documentation Exceptions. Eligibility for a short sale or DIL with borrower documentation exceptions has been expanded to include borrowers whose mortgage debts have been discharged in a Chapter 7 bankruptcy, regardless of the borrower’s FICO score. Additionally, mortgages that were originated as investment properties are no longer eligible for the exception to borrower documentation. Servicers must now review a complete Borrower Response Package (BRP) / Short Sale Package to evaluate these borrowers for a short sale or DIL.
Cash Reserves. Servicers must now submit a short sale or DIL recommendation to Freddie Mac for approval when the borrower’s cash reserves exceed $50,000.
Foreclosure Delays. Servicers and their counsel must delay the next legal action in the foreclosure process when the first complete BRP is received more than 37 days prior to the scheduled foreclosure sale date and evaluation of the package results in an offer to proceed with a short sale or DIL.
Expedited Reviews. Servicers are no longer required to conduct an expedited review when a completed BRP with a short sale purchase offer is received greater than 37 days prior to a scheduled foreclosure sale date. However, servicers must continue to expedite review of a complete BRP received between 37 days and 15 days prior to a scheduled foreclosure sale date.
Trial Period Plans. If a borrower remains eligible for the original Trial Period Plan (TPP) offer after receiving an appeal decision and accepts the original offer, servicers must reissue the original offer with a new TPP due date. Any delinquent amounts accrued during the appeal review process should be included in the modified principal balance.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington
**********************************
like buttons
Comments
kimberly_a_kirkland@fanniemae.com resource_center@fanniemae.com
Escalations@hmpadmin.com and Include: Borrowers name, property address, loan number and authorization to talk to agent. a Brief Description of problem.
Donna, have you provided the appraiser/bpo agent with a repair estimate for any damages or improvements the home requires. The banks and their investors will tell you that short sales are sold as-is and we constantly are forced to point out to them that as-is simply means the buyer has the right to inspect the home and accept it as-is or move on and that if the home is not in the same condition as the nearby comparables, adjustments need to be made to account for the repairs or improvements needed to bring the home up to par with these comps. We provide the appraisers/bpo agents with comparable sales and the repair estimate to help these individuals with their valuations as they are paid a below market rate and unfortunately as with most things you get what you pay for but in this case it's the homeowner/borrower that suffers! If you've already filed the dispute and a new valuation has already been performed you'll need to wait until the value expires. Whether this will be possible will depend on where your seller is at in the foreclosure process and whether an auction date has been scheduled. If it's a larger bank you can also file a complaint with the comptroller of currency but if the original value has been reaffirmed by the subsequent valuation, and if you failed to provide supporting documentation to reinforce your and the buyer's agent's opinion of value unfortunately there's not much that can be done.