Paddy Deighan is a real estate investor, attorney and advocate. This blog is dedicated to providing useful information, tips and guidelines for all of your real estate needs.
Tuesday, December 4, 2012
New Fannie Mae and Freddie Mac Short Sale Guidelines
There was some rather good news for home owners who have loans with GSEs Fannie Mae or Freddie Mac!
If you have a hardship, loss of job, divorce, change in financial circumstance from medical or family issue, etc., you can now be considered for a short sale even if you have not missed a mortgage payment.
Freddie and Fannie will now have the same requirements and procedures. This was not true in the past.
This is great news, especially for people who have a sudden change in their circumstances and can no longer afford their mortgages, but do not want to have their credit ruined in order to be able to sell their home.
So, if you have a change in your circumstances which will change your financial picture, and you want to sell your home without ruining your credit, you may have an opportunity to do this.
This would be a tremendous benefit to many home owners. Yet, this good news seems to have gone overlooked as I spoke with two real estate agents this week that advised that there clients wanted to do a short sale but they (home owners) were current. In both scenarios the home owners DID have hardship and this is still necessary. Apparently, the agents had assumed that since the sellers had to short sell, that they were delinquent. Certainly many if not most home owners that need a short sale ARE delinquent, but not all of them.
Income and value of the home are also not fatal to a short sale with Fannie Mae or Freddie Mac and this seems to be another misconception. I was approached today by a real estate agent from Florida and she believed that we could not get a short sale approved because the home owner had pretty good income. However, after review of the home owner’s situation, his income was good but his expenses were high and he did have hardship so we can now process the short sale when it was otherwise believed that the home owner did not “qualify”.
Paddy Deighan J.D. Ph.D