As of Nov. 1, the new short sale guidelines announced by Freddie Mac went into effect. These guidelines now ensure that Freddie Mac and Fannie Mae have the same rules regarding short sales. There are three main things to be aware of in these guidelines that are designed to speed up the traditionally long, slow short sale process:
- Sellers do not have to be delinquent – A homeowner can claim a hardship that is requiring a home sale, such as death of an owner, disability, divorce, or needing to relocate more than 50 miles for a new job. With this change, homeowners won’t have to miss mortgage payments to be eligible for a short sale.
- Eliminating deficiency judgments – In some cases, Freddie Mac and Fannie Mae will waive the right to go after borrowers for the portion of the loan that remains unpaid after a home sale. In order for this to happen, homeowners must pay part of the amount or sign a contract promising to pay, which gives them some stake in the game.
- Paying off second lien holders – Freddie Mac and Fannie Mae will now pay up to $6,000 to second lien holders to speed up the entire short sale process.
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