New Guidelines Will Expedite Process, Improve Foreclosure Prevention Options
(Fannie Mae) -- Fannie Mae (FNMA/OTC) announced today that it is directing servicers to expedite short sale transactions and improve transparency on short sale reviews. The new guidelines are part of the Federal Housing Finance Agency’s Servicing Alignment Initiative to better match the servicing and loss mitigation standards of Fannie Mae and Freddie Mac.
“Short sales are an important tool to help prevent foreclosures and minimize losses,” said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. “Short sales can be very complex transactions involving multiple parties. By requiring quicker reviews and improving servicer reporting requirements, Fannie Mae will make the process more efficient and transparent. Expediting short sales and avoiding foreclosure is in the best interests of borrowers, communities and taxpayers.”
Under the new guidelines, servicers will be required to acknowledge receipt of a short sale offer within three business days and notify the borrower within five business days if the information is incomplete. Within thirty days, the servicer must send an evaluation notice or notify the borrower that the offer is still under review. If the offer cannot be fully evaluated within 30 days, the servicer must update the borrower on the status each week thereafter. Servicers will also be required to keep Fannie Mae apprised if a short sale evaluation takes longer than 30 days.
Fannie Mae has taken a number of steps to make the short sale process more efficient, including implementing a Short Sale Assistance Desk to help real estate professionals in targeted markets work out challenges in individual short sales. Fannie Mae completed 70,025 short sales in 2011 and 69,634 in 2010.
The Servicing Guide Announcement that was distributed today can be found here.