PMI Short Sale Approval No Longer Required for Fannie Mae from Five Mortgage insurers

Fannie Mae Gains More Short-Sale Authority
Five mortgage insurers have granted Fannie Mae mortgage servicers the authority to Avoid Foreclosure - Complete a Short Sale or deeds in lieu of foreclosure without getting their separate approval, HousingWire reports. 
 
Traditionally, mortgage insurance groups have had to give the okay before a short sale can be processed on a property with a guaranteed loan.
 
Now, without that extra step, Fannie mortgage servicers may be able to speed up Short Sale Approvals on Fannie-backed loans. 
 
The PMI Group, which filed for bankruptcy in November, is the latest mortgage insurer this week to grant Fannie the authority to no longer wait for its approval on short sales. The other four mortgage insurers also giving Fannie the authority are: Genworth, MGIC,Republic Mortgage Insurance Co., and Radian Guaranty.
 
Regardless, Fannie has instructed its mortgage servicers to make sure a short sale does not conflict with any existing mortgage insurance coverage before approving it.

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Comment by Jason Opland on February 26, 2012 at 11:32am

This is a new one and I'm curious as to what leverage the MI Company feels they have considering the approval was already issued annd failed to include the requirement of the Promissory Note. My personal response to the MI Company would be thank you but the short sale has aleady been completed and if you have any further questions on this matter I would suggest you take these up with the mortgage servicer.

Comment by Kathleen Jamal on February 26, 2012 at 8:01am

I'll be interested to see how this plays out.  We recently experienced an approved short sale an no private mortgage insurance claim repayment demand in their approval only to have the homeowner/seller receive a letter from the MI company demanding a Promissory Note 2 WEEKS after the closing of the short sale.

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