Fannie and Freddie May Waive Appraisals on Refis

Fannie Mae and Freddie Mac - with the blessing of their regulator/conservator - are considering ways to expedite real estate "short sales" and possibly waive appraisals to facilitate refinancings of underwater mortgages. Federal Housing Finance Agency director James Lockhart confirmed that these business changes - and others - are under consideration. Speaking with reporters this past week, Mr. Lockhart said, "If they refinance a borrower rather than modify the loan - do they need a new appraisal if they already own the credit? That's an issue that is being worked on." FHFA has pushed the GSEs into adopting a streamlined modification program that goes into effect next week. Fannie and Freddie have suspended foreclosures and evictions until Jan. 9. In a letter to the National Association of Realtors, Mr. Lockhart said the GSEs are working on ways to streamline their loss mitigation process. "With regard to short sales, a number of initiatives are underway that are specifically designed to eliminate bottlenecks and allow workout decisions to made in a faster and more efficient manner." The letter to the Realtors also notes that one GSE is actively considering raising the limit on loans to one investor, which "reflects an appreciation" of the role real estate investors could play in the housing recovery. The GSE (it's not known which) is considering easing its owner-occupied requirements for condominiums by not counting units owned by banks due to foreclosures.