Fannie Mae and Freddie Mac will require loan servicers who need more than 30 days to make a decision on a short-sale offer to provide weekly status updates and give an approval or rejection no later than 60 days after receiving an offer.
The new short-sale timelines, announced last week by Fannie and Freddie’s regulator, the Federal Housing Finance Agency (FHFA), take effect in June as the first step in a broader effort to “develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.“
FHFA said it expects additional changes to be in place by the end of the year that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.
