Shorter Processing Time for Short Sale Transactions

FHFA (Federal Housing Finance Agency) released last April 17, 2012 the new timelines for short sale process for Fannie Mae and Freddie Mac backed loans.  The new timelines will help home owners avoid foreclosure. 


The FHFA's new directive requires the servicers of Fannie and Freddie loans to: (Source: www.fhfa.gov)


- Review and respond to borrower requests for short sales within 30 days after receipt of a short sale offer and a complete borrower request.
- If the review is still under way after 30 days, give the borrower weekly status updates.  (This allows more time where necessary, such as where subordinate lenders and/or mortgage insurance is involved.)
- Advise the borrower of the final decision within 60 days after receipt of a short sale offer and a complete borrower request. 


In cases where the servicer makes a counteroffer, the borrower must respond within 5 business days. The servicer in return, must give its reply within 10 business days of receiving the borrower's response.


According to CNBC report, the long response time have been the no. 1 complaint in the short sale sector. It usually takes up to a year or more for a buyer to get a response which results to buyers dropping out of the transaction.  Fannie and Freddie hold hundreds of thousands of distressed loans and with the new FHFA directive, the process will be expedited. The new timelines will take effect in June.


If you have any questions about real estate, please don't hesitate to contact any of our team.  You may reach  James Team Real Estate on (907)-865-6594 or email us at patrickjameshomes@gmail.com. If you are looking for your new home, you may check out our listings at www.anchoragehomedeals.com.

According to CNNMoney, starting April 1, borrowers with ongoing disputes with creditors over debts of $1,000 or more may no longer qualify for FHA insured loans.  The new rule also applies even if the borrower has a perfect credit score.

Borrowers with ongoing debt disputes of over $1,000, would have to pay the remaining balance or enter into a payment plan with at least 3 payments on it.  Payments made must be documented and submitted to FHA, before they can secure FHA mortgages.

FHA will not include the disputed credit accounts from more than 2 years ago or any credits related to reported identity theft.

In FHA study, they found out that many borrowers that are unable to pay their current mortgages had prior credit deficiencies including unpaid collections and other unresolved credit disputes.

Tiffany Thomas Smith, Deputy Press Secretary for the U.S. Department of Housing and Urban Development said, "It's a way of protecting consumers from getting into loans they ultimately can't afford.

For more information, you can check out http://money.cnn.com/2012/03/30/real_estate/FHA-loans/index.htm.  Or you can contact me for any real estate information.