GSEs Tighten Short Sale Timelines

(from CDPE Newsletter May 2012)

In a Bulletin released April 17, 2012, Fannie Mae and Freddie Mac announced updates to their short sale timeline. These updates include new response-time requirements, which aim to shorten the timeline and improve the effectiveness and efficiency of the entire short sale process.

“When a home retention option is no longer a viable solution to delinquency, it is important to utilize liquidation options, including short sales, as a valuable foreclosure avoidance solution. Improved communication methods will enhance the effectiveness of these options,” writes Freddie Mac in the Bulletin.

The top changes for a submitted Borrower Response Packages include:

  1. Servicer must acknowledge receipt of short sale package within three business days.
  2. If the package is incomplete, the servicer must notify the borrower of missing information within five business days.
  3. Servicer must give an evaluation decision within 30 days of receipt of package.
  4. Servicer must respond to an offer for purchase of a short sale within 30 days.
  5. If for any reason the servicer needs more than 30 days, it must give the borrowers weekly status updates and a decision within 70 days.

For a full list of new timeline changes and requirements, download the complete bulletin here.

With these steps, Fannie Mae and Freddie Mac join the group of lenders actively revamping short sale processes and timelines, striving for easier and more efficient short sales. Bank of America alone plans a 60-70% increase in short sales this year!

BREAKING NEWS!! B of A Short Sale Limited Time Offer

(from B of A Home Loans email received today 5/15/2012)

Short Sale Relocation Assistance Program: You could receive $2,500 to $30,000 in relocation assistance

You want to avoid foreclosure. So do we!

That’s why Bank of America is excited to announce that for a limited time, we are offering enhanced relocation assistance payments in which qualified homeowners who initiate a short sale without an offer could be eligible to receive $2,500 – $30,000* in relocation assistance and owe no more on their mortgage with the sale of their property.

Don’t miss this limited-time offer to get the help you need by having your real estate agent initiate a preapproved price short sale today.

Determining eligibility is easy:

Once the short sale is initiated, B of A will evaluate you, the homeowner, for this offer quickly to determine if you qualify for the enhanced relocation assistance.

The homeowner must participate in one of the preapproved price short sale programs, such as HAFA (Home Affordable Foreclosure Alternatives) or Bank of America’s proprietary program. Specific investor participation and eligibility criteria do apply to these programs.

Have an active preapproved price short sale? Don’t worry.

Bank of America is reviewing all current, in-process preapproved price short sale agreements to determine who is eligible for this limited-time offer.  Eligible homeowners actively participating in a preapproved price short sale program (such as HAFA or Bank of America’s proprietary program) will receive a letter if they qualify for the additional relocation assistance.  The relocation assistance will be paid at closing.

Frequently Asked Questions:

Q: How can I find out if I qualify for this limited time offer?

A: Call a Bank of America short sale specialist at 1.866.880.1232 Monday – Friday 8 a.m. – 10 p.m.; Saturday 9 a.m. – 5:30 p.m. Eastern.


Q: Do I have to do anything special when initiating or completing the short sale?

A: No. But act quickly by initiating the short sale. This is a limited-time offer that you won’t want to miss out on.


Q: If a short sale is initiated with an offer, will it qualify for this relocation assistance?

A: No. This relocation assistance is only available on preapproved price short sale programs.  Short sales initiated at the time an offer is received do not qualify for the enhanced relocation assistance funds.


Q: Will the relocation assistance funds be reported on the HUD-1?

A: Yes, funds received at closing will be documented on the HUD-1, and a 1099-MISC will be issued.


Q: Can the relocation assistance funds be used to pay off existing liens?

A: Yes, the homeowner may use funds to pay off existing liens or to help with relocation expenses.


Q: Is the relocation assistance added to any other incentives, such as the HAFA or Bank of America proprietary program incentives?

A: The homeowner incentive will be inclusive of the $3,000 HAFA incentive.  For example, if the homeowner is eligible for a $5,000 homeowner incentive, $3,000 will be from the HAFA incentive, and $2,000 will be from the homeowner incentive.


Q: Is the enhanced relocation assistance available for other programs?

A: Currently, the enhanced relocation assistance is only available to short sale programs initiated without an offer. However, as we gauge the success we may extend this incentive to other programs.


Homeowners and agents may call 1.866.880.1232 to speak to a Bank of America short sale specialist about this exciting limited-time preapproved price short sale program offering.


*The relocation assistance payment is calculated based on the appraised value of the homeowner’s property. The total amount will be no less than $2,500, but no more than $30,000. The payment will be delivered at the time of closing if the homeowner complies with all terms and conditions of the Short Sale Agreement, which includes but are not limited to the following: a full walk-through appraisal must be completed and the homeowner must satisfy all junior liens and provide clear title for the property (the relocation assistance payment can be used to clear those liens). The short sale must close by September 26, 2013.  If the homeowner does not comply with all terms and conditions of the Short Sale Agreement, they will not receive the relocation assistance payment. The amount of any deficiency and relocation assistance will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms. We suggest that the homeowner contact the IRS or their tax preparer to determine if they have any tax liability.

Escape Your Unmanageable Mortgage: Getting free doesn’t have to mean running away

Perhaps you have heard about it.

On the news, a reporter tells a story about how the housing crisis has caused some homeowners to simply walk away from their homes. It sounds crazy, but many people are being led to believe that walking away from their home is a good (or even the best!) option.

It is called Strategic Default. For distressed homeowners who believe that they have no good choices left, the idea of walking away free of consequence may sound like a relief. The reality, however, is that choosing strategic default has serious repercussions on your credit.


As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially-challenged homeowners with options to escape from unmanageable mortgages without running away.

Facing your problems head-on is always the best solution. Let me help.