Short Sales Timelines Reduced for Home Buying and Selling
Home buyers interested in short sale homes and the sellers of such homes had some good news this week. Freddie Mac established new timelines to aid in expediting decisions for borrowers. Under the new guidelines, once a completed application has been submitted, a decision must be reached within 60 days. Applications can come in the form of a traditional offer or a Borrower Response Package (BRP). After 30 days, weekly updates are now required, as well. If a counteroffer is extended, response time has been regulated too, allowing borrowers 5 days and the servicer 10 days to come to a decision.
The recent real estate market resulted in 45,623 short sales closed by Freddie Mac in 2011, an increase of 140% from the amount of short sales they serviced in 2009. According to Tracy Mooney, Senior Vice President, Single-Family Servicing and REO, of Freddie Mac, “Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating. Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short-sales under the Obama Administration’s HAFA program or Freddie Mac’s traditional short-sale option.” Mooney went on to say that, “Today’s announcement underscores our commitment to help reduce credit losses and taxpayer risks by supporting more opportunities for sustained occupancy in our nation’s homes.”
Keep in mind that if you are purchasing a home through the short sale process, you may need to spend more time and research in identifying the home you decide to purchase and expert help is always advised. Make sure you compare and physically view the property, research any liens or mortgages and contact lenders directly, along with completing your application and offer before negotiating and completing the sale. To find out more about this process from a home seller standpoint, please click here.