Freddie Mac has recently made several changes to its standard Short Sale process which will greatly improve the interval for the approval of Short Sales. Below are the highlights of these changes. These changes were effective as of November 1, 2012.
1. The HAFA Tier II Short Sale has been renamed to Freddie Mac Standard Short Sale by Freddie Mac to signify the changes that have been made for facilitating and streamlining the process.
2. Freddie Mac standard short sale means the servicer (the bank) can make the decision on behalf of Freddie Mac. The servicer no longer needs to get Freddie Mac’s approval as long as the borrower meets the guidelines set by Freddie Mac. This takes out the extra bureaucratic step of waiting for Freddie Mac’s approval.
3. Servicer can now pushes out foreclosure date without asking Freddie Mac to push out the Foreclosure date. Again, another step in reducing the red-tape and empowering the servicers/banks to quickly act on what is necessary.
4. If the borrower is current or less than 31 days delinquent, the servicer will ask for cash contribution. If the borrower is 31 days to 90 days delinquent, servicer will ask for cash and promissory note. If the borrower is 90 days or more late, no cash nor promissory notes will be required. This is to really help the homeowners who are truly in trouble and can’t pay the mortgage.
5. All second/junior liens max allowed total is $6000. This allows the agents who works on Short Sales to know how to negotiate with the secondary lien holders without working in the dark. The good news is that 5 major servicers: Chase, Citi, Wells, Bank of America and GMAC all agreed that if they are in 2nd lien position, they will hold the Short Sale hostage.
We here at Oyezz Real Estate are looking forward to these changes taking place because ultimately this will help our clients to successfully avoid a Foreclosure in a timely manner and finally feel the heavy weight lifting off their shoulders. This is also great for the buyers who are purchasing a Short Sale to quickly close on the transaction without the agonizing long wait.