There seems to be more and more news coming out lately that the short sale process is finally going to be addressed so that it doesn’t take forever to get a reply from a lender on an offer.
This past week Bank of America implemented a new procedure that they say is intended to speed up responses to short sale offer and they are trying to get the timeframe for an initial response to an offer down to 20 days.
Now there is news coming out that the 2 top secondary loan market agencies are setting new timelines to speed things up.
Freddie Mac sets new short sale timelines, Fannie to follow
McLEAN, Va. – April 18, 2012 – Freddie Mac, the federally owned company that buys mortgages from local lenders, says it wants to make the short sale process easier on home sellers by updating its timelines for short sales and requiring better communication from lenders. Last year, Freddie Mac completed 45,623 short sales.
The initiative is part of the Servicing Alignment Initiative (SAI) Freddie Mac and Fannie Mae launched in 2011 at the direction of their regulator, the Federal Housing Finance Agency (FHFA). Yesterday, FHFA announced that Fannie Mae and Freddie Mac must adopt the new short-sale guidelines, and the latter announced compliance shortly after that.
The proposals mentioned in the article are that an initial response should done within 30 days but that if it takes longer than 30 days the homeowner must be given a status update no less than once a week and that the maximum time allowed will be 60 days.
If this does become the norm then it will make short sales much more attractive to buyers which will be very helpful to those sellers who are in the situation where they need to do a short sale.
Knowing how these things work I would say that we’ll need to watch this until at least early to mid summer to see if this actually does work out as it is being described.