The biggest complaint both a buyer and the seller have about a short sale is the time it takes to complete the process. Although a better alternative to foreclosure, the short sale process has been known to drive away potential sales for lenders. However, Fannie and Freddie are taking steps to streamline the process that should eliminate some of the traditional hassles associated with a short sale.
Ready, Set, Sale
The Federal Housing Finance Agency (FHFA) have been working on a plan to prevent foreclosures and offer better assistance to homeowners for quite some time. One of the tools recently developed is requiring lending giants, Fannie Mae and Freddie Mac, to enhance their short sale processing procedures for a more effective process.
The new guidelines for processing short sales will require that lenders respond to homeowner requests to pursue a short sale within 30 calendar days . Lenders will also be required to review and respond to pending short sale offers within 30 days of their receipt. If the contract offer review process continues past the 30 day mark lenders will have to provide weekly status updates to the seller. Further, final approval or rejection decisions must be completed within 60 calendar days of first receipt of the offer.
More changes are expected to be implemented by the end of 2012 including enhancements to homeowner eligibility for the short sale process, simplification of the documentation and property valuation process, as well as fraud mitigation procedures to be put into place.