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Fannie Mae Short Sale Guidelines
When dealing with Fannie Mae (FNMA) you will find that there are many guidelines to navigate. Missing anyone can be dangerous to your completing a short sale with Fannie Mae. Even brokers should work with a professional to complete a Fannie Mae Short Sale.
What is a Fannie Mae short sale?
What makes a Fannie Mae Short Sale so complicated is they add additional layers to the short sale approval process. Normally, the seller presents their loan servicer a Fannie Mae Short Sale Package. This includes, but is not limited to, the 710 Unified Borrower Assistance Form (710 UBAF) and an offer from a short sale buyer. We submit this along with several other documents furnished by the broker and seller as support.
The bank that is servicing your loan will review the short sale package we submit and they will submit it to Fannie Mae for approval. This is where the additional layers come in. Besides the layers of management at the loan servicer, if the seller’s bank approves the short sale, the seller still needs approval of short sale from Fannie Mae’s Short Sale Department; This is provided that the servicer does not have any delegated authority. Due to the additional layer of approval Fannie Mae short sales takes more than the normal short sale program.
What if the seller stay current and want to opt for Fannie Mae Short sale?
If the seller stay current and want to choose Fannie Mae short sale, then answer is yes. Before the November 2012, it was reported that Fannie Mae would not approve the short sale if the seller isn’t delinquent. Other institute like Bank of America and Wells Fargo do not require the seller to be delinquent when a seller is current to issue the approval of a short sale.
Before the 1st of November 2012, it was experienced that Fannie May was not issuing the approval of short sale. If Bank of America issued the short sale and sent the package to the Fannie Mae that was rejected because the seller was current and making the payments. After that seller has to stop making payments, and need to apply again after getting the delinquent. Fannie Mae was used to approve the short sale only if the seller was delinquent.
What if the short sale is pending?
Is it possible that Fannie Mae will postpone the Trustee’s Sale if the short sale offer is pending? Unfortunately, the answer seems to be “No”. Fannie Mae has declared that it will not be stopping the foreclosure process in case the notice of default has been filed. If the short sale could not be finalized prior to the auction date, Fannie Mae will go for foreclosure, even if the short sale is not approved due to the delay at Fannie Mae.
This was mad way and a lot of sellers were suffering, but after the November 2012, the government has not been pushing the sellers to go into foreclosure if they are current at mortgage payments. Unfortunately, once the foreclosure process begins, the government will take away the home from seller if the short sale could not be closed prior to the auction date.
After the 30th of June 2012 for the sellers who close a short sale, Fannie Mae will allow the seller to remain current if the seller is a member of military with Permanent Change Orders. New guidelines issued by the FHFA, effective from 1st November, allow sellers to remain current with a hardship and still do a Fannie Mae short sale.
Brief History of Fannie Mae:
Fannie Mae along with Freddie Mac are two different mortgage giants in the United States. They own almost three out of four houses. Fannie Mae was established in 1938 by the President Franklin D. Roosevelt and Congress for the purpose of buying mortgages in the secondary market. After the public offering in 1968, Fannie Mae gained the record profits before the great recession of 2007 in the real estate industry. Fannie Mae got the government conservator-ship in September 2008, under the Federal Housing Finance Agency.
Fannie Mae Short Sale Guidelines
- Second Mortgage Settlement Allowance: 6,000.00
- Fannie Mae Does Not Allow Outside Contributions On Short Sales.
- They Control What They Allow To Be Paid In Short Sale Escrow Closing Costs/Fees.
- Fannie Mae Does Not Allow Money To Non-Mortgage Junior Liens.
- Short Sale Participating Junior Lien Holder Must Waive Their Deficiency.
- Fannie Mae Short Sales Pay Broker Commissions Up To 6%.
- Their Short Sales Are Worked In Homepath.
- Fannie Mae Requires Their Specialized 3rd Party Authorization Form.
- All Short Sales Require Two Property Values Ordered. One, Appraisal And One Broker’s Price Opinion (BPO).
- Fannie Mae Completes Interior Values.
