The FHA directed Fannie Mae and Freddie Mac to develop “enhanced and aligned” strategies for facilitating short sales, deeds-in-lieu, and deeds-for-lease in order to help homeowners avoid foreclosure. The FHA noted that Fannie Mae and Freddie Mac’s efforts will come in stages, with the first to take place in June 2012. Under the new aligned timeline, servicers will be required to:
- Review and respond to requests for short sales within 30 days from receipt of a short sale offer;
- Provide weekly status updates to borrowers if the short sale offer is still under review after 30 days; and
- Make and communicate final decisions to borrower within 60 days after receipt of the offer and complete borrower response package.
Enhancements addressing borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders and mortgage insurance are forthcoming and expected by the end of the year. Click here for the related press release.