nmp news flash
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“We support efforts to protect the taxpayers, but want to emphasize the importance of ensuring continued liquidity that will provide the affordable mortgage financing necessary to support the housing market. It is critical that the transition of Fannie Mae and Freddie Mac’s role in financing real estate does not limit the availability, or increase the cost, of financing.”
FHFA Releases New Short Sale Guidance for GSEs
Home Values Continue to Climb in July Home values continued to climb in July, increasing 0.5 percent from June to a Zillow Home Value Index of $151,600, according to the July Zillow Real Estate Market Reports. Home values were up 1.2 percent year-over-year. Sixtytwo percent of the metro markets covered in the reports saw home values climb during the month, with only 49 of the 167 metro areas experiencing declines. Of the 30 largest continued on page 34
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NationalMortgageProfessional.com
KENTUCKY MORTGAGE PROFESSIONAL MAGAZINE SEPTEMBER 2012
The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac— the government-sponsored enterprises (GSEs)—are issuing new, clear guidelines to their mortgage servicers that will align and consolidate existing short sales programs into one standard short sale program. The streamlined program rules will enable lenders and servicers to quickly and easily qualify eligible borrowers for a short sale. 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.” This alignment comes as part of a broader FHFA effort, the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners. FHFA announced guidelines in June that establish strict timelines for servicers considering short sales. Servicers are required to review and respond to short sales within 30 days of receipt of a short sale offer; they must provide weekly status updates to the borrower if the offer is still under review after 30 days, and they must make and communicate final decisions to the borrower within 60 days of receipt of the offer and complete borrower response package. These borrowers will not be eligible for a new mortgage backed by Fannie Mae
or Freddie Mac for at least two years after a short sale. “As the leading advocate for homeownership, Realtors know that when a family is absolutely unable to keep their home, a short sale is often the best option for homeowners hoping to avoid foreclosure,” said National Association of Realtors (NAR) President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Realtors appreciate FHFA’s efforts to increase the number of short sale approvals,
which limit the losses incurred by homeowners, lenders, the federal government and taxpayers.” NAR worked closely with FHFA and the GSEs to create the new guidelines and has long advocated improving the short sale process to provide more distressed homeowners with alternatives to foreclosure. NAR believes that improving short sale eligibility will allow more families to avoid foreclosure and reduce the negative impact foreclosures have on families and communities. Short sales also help stabilize home values and neighborhoods by keeping homes occupied, which benefits the housing market and aids in the recovery.