Archive for November 16th, 2012

Las Vegas Urged to Speed up Short Sales on Fannie Mae and Freddie Mac

Friday, November 16th, 2012

The newly implemented guidelines by the Federal Housing Finance Agency are intended to put short sales of Fannie Mae and Freddie Mac into the fast lane. These short process sales are being eyed as delaying tactics in an attempt to land on a higher sales price.

It was set into action on November 1st and is a great part of the FHFA’s Servicing Alignment Initiative. Fannie Mae is still hopeful that by the short sale scheme it will have more approvals. One of the changes under this initiative is to limit the subordinate lien holder payments to $6,000.

The Servicing Alignment Initiative also stops the negotiations by second-lien holders to get larger checks from their deals. Senior Vice President of the National Servicing Organization of Fannie Mae, Leslie Peeler, says that as much as possible they are trying to avoid foreclosures on homeowners’ properties. One way of getting it done, according to Peeler is to hire junior lien holders and mortgage insurers to get into the market.

But he further agrees that the new set of guidelines will allow more homeowners to qualify for short sales. Fannie is also cutting the amount of paperworks that is required for a short sale under difficult circumstances. This will mostly benefit borrowers who have a credit score rating lower than 620 and those are over 90 days delinquent in payments of their loans. Under the new initiative the deficiency is waived automatically.

The Obama Administration has made new arrangements with these two firms and strictly arranged the companies’ portfolios to be not higher than $650 billion each. The plan is to shrink the holdings of these two mortgage companies and require them to pay the government of quarterly profits.