(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:
- Servicer must acknowledge receipt of short sale package within three business days.
- If the package is incomplete, the servicer must notify the borrower of missing information within five business days.
- Servicer must give an evaluation decision within 30 days of receipt of package.
- Servicer must respond to an offer for purchase of a short sale within 30 days.
- 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!