Federal Guidelines Expediting Short Sale Procedures
By now you’ve probably already heard about the benefits of a short sale if you are facing a foreclosure situation. With a short sale transaction, the bank accepts less than is owed and forgives the balance of the mortgage. There are a couple of disadvantages to a short sale. First, it will affect your credit score, although not as severely as if the bank had foreclosed on the property. The second drawback to a short sale is the grueling and lengthy process. In many cases, the long wait time for a response forces many buyers to give up leaving the sellers in a situation where they have to start over again and in some cases the properties then end up in foreclosure.
The Federal Housing Finance Agency has heard the plight of homeowners, buyers and lenders and has now issued new guidance requirements intended to expedite the process for Fannie Mae and Freddie Mac backed loans.
By now you’ve probably already heard about the benefits of a short sale if you are facing a foreclosure situation. With a short sale transaction, the bank accepts less than is owed and forgives the balance of the mortgage. There are a couple of disadvantages to a short sale. First, it will affect your credit score, although not as severely as if the bank had foreclosed on the property. The second drawback to a short sale is the grueling and lengthy process. In many cases, the long wait time for a response forces many buyers to give up leaving the sellers in a situation where they have to start over again and in some cases the properties then end up in foreclosure.
The Federal Housing Finance Agency has heard the plight of homeowners, buyers and lenders and has now issued new guidance requirements intended to expedite the process for Fannie Mae and Freddie Mac backed loans.
These guidelines include:
- Acknowledge of receipt of a short sale purchase offer within three business days
- Lenders must respond to short sale requests within 30 days
- Make a final decision within 60 days of receiving purchase offer
These new guidelines are expected to begin after June 15, 2012.
According to the NAR (National Association of Realtors), this streamlined and expedited process will improve the likelihood that the transaction will close and reduce the number of foreclosures. This in turn can help to stabilize home values.
Short sales have proven to be a great investment and with these new federal guidelines will become and even more viable alternative for sellers facing foreclosures and buyers looking for a great deal. This is one more step in helping the depressed real estate market to recover.
These guidelines include:
- Acknowledge of receipt of a short sale purchase offer within three business days
- Lenders must respond to short sale requests within 30 days
- Make a final decision within 60 days of receiving purchase offer
These new guidelines are expected to begin after June 15, 2012.
According to the NAR (National Association of Realtors), this streamlined and expedited process will improve the likelihood that the transaction will close and reduce the number of foreclosures. This in turn can help to stabilize home values.
Short sales have proven to be a great investment and with these new federal guidelines will become and even more viable alternative for sellers facing foreclosures and buyers looking for a great deal. This is one more step in helping the depressed real estate market to recover.
