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New Short Sale Guidlines Make It Easier to Qualify

On November 1, 2012 Freddie Mac and Freddie Mae changed the prevailing short-sale guidelines that featured examples of eligible hardships that permit homeowners to sell their homes even if current on their mortgages. Ultimately that new guidelines enabled lenders and servicers to quickly and easily qualify borrowers. Let’s take a look at the main changes:

Eligibility Requirements

  • Mortgage must be owned by Fannie Mae or Freddie Mac
  • Borrower must show hardship
  • Death of borrower or co-borrower
  • Unemployment
  • Divorce
  • Long term disability
  • Employment transfer/relocation over 50 miles away
  • Increased housing expenses
  • Disaster
  • Business failure

New Guidelines

  • Offer a streamlined short-sale program for the borrowers most in need.
  • Enable servicers to quickly and easily qualify borrowers that are current.
  • Fannie Mae and Freddie mac will waive the right to pursue deficiency judgments in exchange for financial contribution if a borrower has sufficient income or assets to make cash contributions or sign promissory notes.
  • Special treatment for military personnel with Permanent Change of Station orders will be given.
  • Provides servicers and borrowers clarity on processing a short-sale when foreclosure sale is pending.
  • Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to help expedite a short-sale.

Not sure if a short-sale is right for your situation? Call us or send an e-mail to mhedayat[at]mha-law.com to learn more.

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