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 1st.
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.”
Peter
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