Real Estate Short Sale Policy to Quicken the Sales Process
May 15, 2013 –Fannie Mae and Freddie Mac have included policies to
quicken the process for short sales The new resources will help
determine property values.
According to National Association of Realtors, short sales accounted for
9 percent of transactions during the first quarter of 2013.
The short sale process has mostly been a slow, long and frustrating
experience for homebuyers and sellers
The Director of short sales at Fannie Mae, said the agency is working to
expedite the short sales process.
“We are improving transparency and have created a dedicated short sales
team to negotiate directly with real estate agents,” he said. “We now
order a valuation as soon as an owner indicates they want a short sale,
rather than waiting for an offer to be received. If there is no response
to an offer from the loan servicer within 30 days, the case can be
escalated. Our process is to counter every short sale offer.”
A foreclosure can be postponed if a short sales offer is received
preferably at least two weeks from a scheduled foreclosure. Fannie Mae
created a web-based channel to help agents escalate short sale issues
and receive confirmation that the agency is actively working to get
those issues resolved.
“To help estimate the values of distressed homes, the team uses
appraisals, which are required for all short sales, as well as Broker
Price Opinions, and data from other internal and external sources,
including current listings, pending sales and sold properties”. The
Fannie Mae valuation team includes 2,000 appraisers around the U.S., who
have local competency and produce valuations within three weeks. Sales
of comparable properties used for valuation need to be within the past
Mortgage servicers are required respond to short sale offers within 30
to 60 days, and Fannie Mae may make a counter offer. Any payments on
second loans must not exceed $6,000. If accepted, the borrower is
released from any liability for the second loan and may not be required
to make a contribution.
Improvement in the appraisal process is a critical point. Appraisers
must have local knowledge and are required to produce accurate
appraisals. Freddie Mac’s policy is similar, and many larger servicers
have implemented similar programs.
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