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Improvements and more improvements have been the recurring case for the government sponsored enterprises Freddie Mac and Fannie Mae. Although these GSE’s (Government Sponsored Enterprise) had a slow start in finding the right solutions for the housing crisis we are facing, the momentum for improvements via federal guidelines have picked up speed. The Goal: Get through distressed properties quickly to catalyze the housing recovery. How? Streamline their short sales. Let’s explore new and improved federal guidelines these GSE’s will implement on November 1^st.

Click the links below to see if your mortgages are backed by Freddie Mac or Fannie Mae:
Freddie Mac or Fannie Mae

Please read this concise document from FHFA.GOV HERE for the new Fannie and Freddie Guidelines and eligibility requirements.

Notes on new FHFH Guidelines:

• A significant change for starters is homeowners being eligible for a short sale without being in default or at risk of imminent default. If the homeowner is able to show hardship and back it up with proper documents, a short sale is now possible. Note that it is not only for those who are relocating due to current or new employment (this may be confusing).
• The right to pursue deficiency waiver for monetary exchange or promissory note applies to those who have sufficient income or assets. Even then, if you have a solid negotiator and/or short sale team, you can walk away from the property with little liability.
• For those who are in serious financial distress (missed several payments and have low credit scores), a short sale will be more streamlined as documents required to show hardship has been reduced or eliminated.

In the past, the GSE’s guideline alterations were not received well by many professionals in the real estate community. However, these new changes presented by the FHFA were well received by U.S. Realtors and an international credit rating agency. This includes the National Association of Realtors who said, “Making the short sale process go more smoothly will help avoid foreclosure and keep homes occupied.”

www.seattleshortsaleblog.com

Peter

Washington, DC - The FHFA is seeking financial recovery from recently filed lawsuits according to its press release today.  It went on to say, "at this time, it would be premature and potentially misleading to estimate the size of any potential recoveries" and that "press reports that FHFA is seeking nearly $200 billion in damage are excessive." 

Full Press Release

Washington, DC -- The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac (the GSEs), today filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters.  The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the Enterprises.  

There are 17 separate suits all relating to mortgage origination and mortgage-backed securitization. Being separate actions the allegations vary from case to case.  Here's a sampling of allegations:

• Loan-to-Value Data Was Materially False
• Owner Occupancy Data Was Materially False
• The Originators of the Underlying Mortgage Loans Systematically Disregarded Their Underwriting Guidelines
• Failure To Conduct Proper Due Diligence
• Defendants Incentivized to Fund Risky Residential Mortgage Loans
• Material Misrepresentations and Omissions in the Offering Materials
• Fraud

Read more - including List of Lead Defendants.