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On April 17, the Federal Housing Finance Agency (FHFA) announced a new directive as part of FHFA’s continued servicing alignment initiative that directs Fannie Mae and Freddie Mac to align their guidelines for servicing delinquent mortgages they own or guarantee.
The new directive requires that servicers of Fannie and Freddie loans:
• Review and respond to borrower requests for short sales within 30 days after receipt of a short sale offer and a complete borrower request.
• If the review is still under way after 30 days, give the borrower weekly status updates. (This allows more time where necessary, such as where subordinate lenders and/or mortgage insurance is involved.)
• Advise the borrower of the final decision within 60 days after receipt of a short sale offer and a complete borrower request.
The new timelines apply both to HAFA loans and to other short sales approved by Fannie Mae and Freddie Mac. Additional enhancements are planned by the end of 2012 addressing borrower eligibility, simplifying documentation, valuing property, payments to subordinate lien holders, and mortgage insurance.
REALTOR® officials at the national, state and local level applaud the move by FHFA to streamline the short sale process. Faster response times will help thousands of distressed homeowners, according to Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
“Short sale transactions are more complicated than regular transactions and they have taken so much time that many prospective buyers have walked away from short sales,” said Yost. “The FHFA’s move to streamline the short sale process is a critical step toward a full housing market recovery.”
Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced on Monday that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.
The basic eligibility requirements for an enhanced HARP loan are as follows:
• Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Check here here to see whether a borrower has a Fannie Mae or Freddie Mac loan.
• Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
• Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
• Current loan-to-value (LTV) ratio must be more than 80 percent.
• Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.
Silicon Valley Association of REALTORS® says ... 