Freddie Mac: Short sale process cut in half or more

Jan. 24, 2013 – Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.

“We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent,” as a result of the changes, writes Tracy Mooney, Freddie Mac’s executive vice president in her recent blog post. “We worked with our regulator, the Federal Housing Finance Agency, to remove obstacles and streamline the process, so we can help more borrowers and reduce costs for the company and taxpayers. The end result is a shorter short sale process that’s long in benefits for borrowers.”

Among the Nov. 1, 2012, changes:

• Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days.

• Mortgage servicers must acknowledge receipt of a short sale application within three days of submission. Servicers must provide weekly status updates if they need more time to review the application past the initial 30-day period.

• Mortgage servicers have the authority to approve short sales when qualifying financial hardships for homeowners who are past due or current on their mortgage payments.

• Mortgage servicers may also approve short sales without a separate review by the mortgage insurance company.

Following a short sale, homeowners may be able to qualify for up to $3,000 in relocation assistance.

 







Source: “The Shorter Short Sale: Long on Borrower Benefits,” Freddie Mac Executive Perspectives Blog (Jan. 22, 2013)

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