The Federal Housing Finance Agency (FHFA) wants Fannie Mae and Freddie Mac to be more responsive to troubled homeowners seeking a short sale solution or who receive a bid from an interested buyer.
The GSE regulator this week released timelines for decision making in short sale or deed-in-lieu (of foreclosure) transactions. Servicers working for the mortgage giants must respond within 30 days to a borrower’s application for a short sale or a bid from a buyer. The borrower must receive a final decision within 60 days.
If a decision takes longer than 30 days, the GSE servicer must provide the borrower with a weekly status update.
“These timeline and borrower communication announcements set minimum standards and provide clear expectations regarding these important foreclosure alternatives,” said FHFA acting director Edward DeMarco said.
FHFA wants to streamline the short sale process, making it more efficient for the GSEs which control a large number of seriously delinquent loans.
Many of these nonperforming loans are “severely aged,” and “we’re not seeing short sales for the situation we are in,” a FHFA official told National Mortgage News back in February.
Freddie Mac said it will use the new timelines to evaluate servicer compliance with its servicing requirements. The GSE completed 45,600 short sales in 2011.