Last week I wrote a blog about changes in the Freddie Mac and Fannie Mae short sale guidelines. There is more news and this sounds like good news for a change. Freddie Mac announced yesterday that thanks to its Freddie Mac Standard Short Sale program the short sale process “will decrease by approximately 50 percent to 75 percent” according to Tracy Mooney, senior vice president for Freddie Mac. The Freddie Mac Standard Short Sale Program was launched on November 1, 2012. The program made changes to decision timelines, requiring banks to make a decision within 30 days if they are the only lender involved in the decision and within 60 if they have to negotiate with third parties. Freddie also expanded servicer delegations so that they could approve short sales for “qualifying financial hardships” directly rather than waiting on approval from Freddie Mac. Mooney also described the “increased transparency” that she believes will come by requiring acknowledgement of receipt by servicers once they have received applications and weekly status updates after the first 30 days of the review. Servicers will also be required to establish a clear “escalation process” that includes a dedicated 800 number, and homeowners will be eligible to apply for up to $3,000 in relocation assistance through the program upon successful completion of the short sale.
Mooney also reminded readers that Freddie Mac is now working on a streamlined deed-in-lieu process that will debut in March 2013. As I mentioned many times, in this real estate environment, something old is something new again. Deed in Lieu (DIL) was prominent from 2007-2010 and then they disappeared and I believe that they will return in some fashion. However, I recommend that any potential DIL be thoroughly reviewed prior to acceptance. All DILs are not the same and they are negotiable, so it is prudent to not just sign whatever is put in front of the home owner.