some new short sale policy changes that Fannie
Mae and Freddie Mac will be initiating next year, starting on Jan. 10.
Apparently, these mortgage giants are looking to expand the help they provide to
homeowners considering a short sale or a deed in lieu of foreclosure. Here are three things you should know.
1. People who have had their loans purchased or guaranteed by either Fannie Mae
or Freddie Mac by Nov. 1, 2015, may qualify for a short sale without being late
if they meet some of the following key hardship criteria: unemployment, divorce,
long-term disability, change of employment that is more than 50 miles away,
failure of a business, death of a borrower or co-borrower, or a natural or
2. Fannie Mae and Freddie Mac currently have a rule that a homeowner wanting to
short sell must be at least 30 days delinquent on mortgage payments. With the
new rules, that won't be a hard and fast stipulation in some situations.
3. Homeowners who are seriously delinquent will have the ability to have their
cases reviewed by the lender through a streamlined process, with reduced
documentation and a faster response time. Both Fannie Mae and Freddie Mac,
however, will cap the payouts to holders of second mortgages on a property to
$6,000 and this may be problematic. Overall, these changes seem to be beneficial for the majority of homeowners who
are facing difficulty keeping up with their mortgage payments. Common sense
would dictate that it's not out of the question to think that certain situations
would allow for people to continue making payments, at least for a short time,
while they're in a period of transition. The biggest potential pitfall in this plan is the $6,000 cap to junior
lienholders. Oftentimes, lenders holding second mortgages will want more than
this amount and may not agree to the payout, especially if the homeowner has
stopped making payments on that loan, even if the first mortgage is current.
That doesn't mean you can't do a short sale, it just means that it may be a
greater challenge for an already struggling homeowner.