House Keys
By Paul Owers
August 21, 2012 09:38 PM
Ask a real estate pro: Don’t take no for an answer on short sales
Board-certified real estate attorney Gary M. Singer writes about the housing market in this space each Friday. To ask him a question about short sales, mortgages, refinancing, homeowner’s associations or any other residential real estate topic
Q: Although I have a financial hardship, my lender recently turned down my short sale request because I was not 45 days late on the payment. I am out of money and willing to leave the property but don’t want to go through the trouble of a foreclosure. I want to do the right thing, but I don’t know what that is. Can you help? – Robert
A: I have often said that it is worth trying a short sale while you are still making payments. If the short sale is approved, it’s easier on you, your neighbors and the bank. Although some lenders are willing to work with you while you’re still current, others require the loan to be delinquent. I have been told they do this to scare away “strategic” short sellers, but this does more harm than good to all involved, in my opinion. My advice: Try again. I have helped many clients get approvals from the same lender shortly after a denial by simply resubmitting the application.
Sometimes the difference between a denial and an approval has less to do with the lender than the individual negotiator. It’s likely that you’ll get a different negotiator the second time around.
And sometimes lenders change their policies.
Just last week, the government announced that it’s giving banks “more clear and consistent guidelines making it easier to process and execute short sales.”
Homeowners with Fannie Mae and Freddie Mac mortgages now can be approved if they’re still making payments, assuming they have a hardship. The new guidelines go into effect Nov. 1.
House Keys
Housing agency announces short sale changes
By Paul Owers
August 21, 2012 09:38 PM
Struggling homeowners could find it easier to get lender approval for short sales under a plan announced Tuesday by the Federal Housing Finance Agency:
FROM FHFA:
The new guidelines, which go into effect Nov. 1, 2012, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship. Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability, or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.
“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”
FHFA oversees Fannie and Freddie, which together own about half the nation’s mortgages. In a short sale, a homeowner sells for less than the mortgage amount.
