Freddie Mac’s New Standard Short Sale program has been implemented for about three months now and Freddie Mac continues to advertise and spread the words about this new program to the homeowners who are behind on payments about their options through a blog post on Freddie Mac’s website as well as hosting educational classes to Realtors.
“Early results indicate that this program is beginning to take hold with homeowners and realtors,” stated Tracy Mooney, SVP on the Executive Perspectives Blog.
Mooney expressed an expectation that the program will reduce short sale timelines by between 50 and 75 percent.
Servicers (aka banks) have more authority and responsibility under this new program.
Upon receiving a completed short sale application, the servicers/banks are given a maximum of 30 days to determine if they will accept the short sale.
If they must consult third parties before making the decision, they may take at most an extra 30 days.
If the servicer needs more than 30 days to make a decision, it has to provide weekly updates to the homeowner.
“A final decision is required by day 60,” Mooney said.
In order to ensure servicers are able to meet the 30 day interval deadlines, Freddie Mac is allowing servicers to approve short sales without consulting mortgage insurance companies.
Freddie Mac has received consent from nine Mortgage Insurers to allow servicers to waive their normal approval process in order to reach faster decisions regarding short sales.
Servicers are also given the responsible for determining financial hardships for short sale applicants.
In March, Freddie Mac will roll out another new program streamline the deed-in-lieu of foreclosure process.
Freddie Mac encourages homeowners to find out whether Freddie Mac is the owner of his or her loan with the Loan Look-up Tool on their website and contact her or her servicer/bank for applying.
Homeowners and Realtor can also browse Freddie Mac’s Avoiding Foreclosure Resource Center online.
Both GSEs (Freddie Mac and Fannie Mae) worked with their regulator, the Federal Housing Finance Agency (FHFA), to establish short sale deadlines and streamline the process last year and has made these guidelines effective in November, 2012.