Fannie Mae and Freddie Mac will now require mortgage servicers, who need more than 30 days to review a short sale, to provide weekly status updates and make a decision no later than 60 days after receiving an offer. This new timeline was announced this week by the Federal Housing Finance Agency, the agency who regulates Fannie and Freddie. It is set to begin in June. This is the first of many changes set to take place by the end of the year to help facilitate the short sales process as well as other ways through which banks are dealing with distressed properties.
Bank of America has already shortened it’s decision window to 20 days from 45.
This is a major shift from the way short sales have been handled, taking anywhere from 6 to 9 months to get lender approval in some cases. I anticipate this really helping the market and also encouraging Buyers to really consider short sales. Currently, many Buyers have a deadline by which they want to move and purchase a home. The uncertainty of a settlement date, when trying to purchase a short sale, has caused many Buyers not to consider them.
I am hopeful these changes will continue and short sales can be a real option for all Buyers. It will help values, Sellers, Buyers and all aspects of the market.