Good News for processing Short Sales faster and with more transparency, Freddie Mac (OTC: FMCC) is updating its timelines and also requiring servicers to provide weekly updates when decisions take more than 30 days after the receipt of a complete application for a short sale under the Obama Administration’s Home Affordable [...]]]>

Good News for processing Short Sales faster and with more transparency, Freddie Mac (OTC: FMCC) is updating its timelines and also requiring servicers to provide weekly updates when decisions take more than 30 days after the receipt of a complete application for a short sale under the Obama Administration’s Home Affordable Foreclosure Alternative (HAFA) initiative or Freddie Mac’s traditional requirements. All decisions must be made within 60-days

Here are the new Timelines per Freddie Mac

• Freddie Mac’s new short sale timelines require servicers to make a decision within 30 days of receiving either 1) an offer on a property  under Freddie Mac’s traditional short sale program or 2) a completed Borrower Response Package (BRP) requesting consideration for a short sale under HAFA or Freddie Mac’s traditional short sale program.  (BRPs are standardized assistance applications developed as part of the Servicing Alignment Initiative.)
• If more than 30 days are needed, borrowers must receive weekly status updates and a decision no later than 60 days from the date the complete BRP is received.  This will help servicers who may need more time to obtain a broker price opinion or a private mortgage insurer’s approval on a BRP or property offer.
• In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
• Freddie Mac will use the new timelines to evaluate servicer compliance with the SAI and its own servicing requirements.
• Freddie Mac completed 45,623 short sales in 2011, a 140 percent increase since 2009.  Overall, Freddie Mac has also helped more than 615,000 distressed borrowers avoid foreclosure since the housing crisis began.

Mortgage servicers will be kept to strict short sale timelines agreed to under the state Attorneys General foreclosure settlement this week.

As part of a settlement the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy [...]]]>

Mortgage servicers will be kept to strict short sale timelines agreed to under the state Attorneys General foreclosure settlement this week.

As part of a settlement the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

• Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.
• Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.
• Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale.
• Servicers are also required to form an internal group to review all short sale requests.
• Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests. Violations can carry fines of up to $1 million and $5 million for repeat offenses, per REALTORMag

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”