Fannie Mae is directing servicers to expedite short sale deals and improve transparency on these reviews.
The new guidelines are part of the Federal Housing Finance Agency’s Servicing Alignment Initiative to better match the GSEs' servicing and loss mitigation standards.
“Short sales are an important tool to help prevent foreclosures and minimize losses,” said Leslie Peeler, senior vice president, national servicing organization at Fannie Mae. “Short sales can be very complex transactions involving multiple parties. By requiring quicker reviews and improving servicer reporting requirements, Fannie Mae will make the process more efficient and transparent. Expediting short sales and avoiding foreclosure is in the best interests of borrowers, communities and taxpayers.”
Under the new guidelines, servicers will should acknowledge receipt of a short sale offer within three business days. They also need to notify the borrower within five business days if the data is incomplete. Within thirty days, the servicer should send an evaluation notice or notify the borrower that the offer is still under review. If the servicer cannot fully evaluate the offer within 30 days, the servicer is required to update the borrower on the status each week thereafter. Servicers will also be need to keep Fannie Mae apprised if a short sale evaluation exceeds 30 days.
Earlier in April, ASR sister publication National Mortgage News reported that Federal Housing Finance Agency had released timelines for decision making in short sale or deed-in-lieu (of foreclosure) deals. For ASR's coverage on the issue, please click here.