The Federal Housing Finance Agency—which recently established time limits for GSE servicers to respond to short sale offers—is now trying a expedite the negotiation process between various parties in such transactions.
Protracted negotiations generally revolve around the sales price and the formula used to determine if the borrower has the financial assets to offset some of the losses, according to FHFA acting director Edward DeMarco.
“To address these fundamental concerns, we are trying to develop a policy that can be accepted by all parties, to eliminate the protracted negotiations and make very clear who is eligible for a short sale, under what terms, and what price is sufficient to make the deal work,” the regulator told a National Association of Realtors meeting in Washington this week.
He expects the FHFA will issue new short sale guidance by the end of September. “FHFA wants to make this process more streamlined and efficient.”
Realtors said they welcome the agency’s efforts, including the requirement that Fannie Mae/Freddie Mac servicers must respond to a short sale offer within 30 days.
But Realtors claim servicers are losing paper work and the 30-day time period doesn’t start until the servicer has a complete file.
The FHFA director said it is in Fannie and Freddie’s interest for short sale transactions to be executed in a timely and efficient manner. “We should find out where these breakdowns occur—which parties are having the most trouble doing this right” and fix it, he said.
