According to Senior Vice President for Freddie Mac, Tracy Mooney, the new guidelines should cut the time required to process a short sale on a Freddie Mac loan by 50 – 75%. In a recent article on her Executive Perspectives blog the SVP described the new Freddie Mac Standard Short Sale program as a faster, easier, more transparent process. Changes have been initiated aimed at a more streamlined process for a distressed homeowner to obtain approval on a short sale. The end result, says Mooney, is a shorter short sale process that’s long in benefits for borrowers:
Quicker decisions: Now servicers have 30 days to make a decision once the application is completed, and another 30 days if needed to negotiate with third parties. A final decision is required by day 60.
Increased Delegations: Delegation authority for servicers was expanded giving them authority to approve short sales for qualifying financial hardships for homeowners who are past due or current on their mortgage payments. Additionally servicers have the authority to approve short sales without time-consuming reviews by the mortgage insurance company. This step a loan removes an obstacle that has proved very time consuming and problematic in the past.
Better communication: Servicers must acknowledge receipt of a short sale application within 3 days of submission and abide by guidelines designed to increase transparency into the process by keeping borrowers and their short sale realtors informed along the way. Weekly status reports are required when deadlines are exceeded.
Escalation process: Servicers are required to establish an escalation process and communicate it to borrowers in writing, including a dedicated 800 number. Most servicers are already providing this on monthly mortgage statements.
Relocation assistance: Borrowers can qualify for up to $3,000 in relocation assistance to be paid at closing.
This excerpt is taken directly from Freddie Mac’s website…
“Should You Consider A Short Sale?
If all retention options have been exhausted or are not possible, a short sale is a good alternative to foreclosure that allows distressed homeowners to gracefully leave their home and transition to more affordable housing. It’s also typically less damaging to a borrower’s credit report than foreclosure, and usually reduces the amount of time a borrower needs to wait to get a new mortgage down the road.”
Steps To Get Started With A Freddie Mac Short Sale:
- Find out if Freddie Mac owns your mortgage by visiting our
Loan Look-up Tool.
- If Freddie Mac owns your loan, reach out to your mortgage servicer. Their telephone numbers and mailing address should be listed on your monthly statement or coupon book.
If you or someone you know is considering a Freddie Mac or any other type of short sale in the Denver metro area feel free to contact me for a free consultation to review your situation. If you decide to have me represent you in a short sale of your property the fee for my services are paid by your lender.