DS News - Digital Archives

�� FANNIE MAE ANNOUNCES TOOL TO ESCALATE SHORT SALES Fannie Mae introduced a new tool last month for real estate professionals who find themselves stuck in the short sale process. The HomePath for Short Sales tool can be used by agents to escalate the short sale process. The tool is only for loans owned by Fannie Mae. When agents escalate a case, Fannie Mae will contact the appropriate agent or servicer to address the challenge that may be stalling the process. Examples of issues that can hinder it include valuation disputes, delays by servicers, or uncooperative subordinate lien holders. Agents can also use the tool to receive a recommended list price from the GSE before listing the property. ���Our goal is to prevent foreclosures and help stabilize communities,��� said Jay Ryan, VP for real estate sales at Fannie Mae. ���By giving agents a straightforward, transparent way to escalate short sale issues to Fannie Mae, we will close more sales, prevent foreclosures, and help neighborhoods continue to recover. Getting short sales done benefits everyone involved, and we���re committed to doing our part.��� The GSE provided examples of instances where the tool was able to help real estate professionals. ���I was working on a short sale recently with a servicer who was not being responsive, so I used the HomePath for Short Sales site to escalate the case to Fannie Mae. I heard back very quickly and within two days the sale was approved. My clients will now be able to avoid foreclosure,��� said Kelby Teer, a real estate professional with HomeSmart. ���I���ve found HomePath for Short Sales to be an easy tool to communicate with Fannie Mae. Recently I escalated a file to work out a difference in valuation, and in less than 24 hours, it was resolved. I appreciated that I could send comps directly to Fannie Mae and let [it] know what we were seeing on our side of the short sale,��� said Maryann Little, VP for short sale mitigation with AA Premier Properties, LLC, and Short Sale Mitigation, LLC. According to a company release, Fannie Mae completed 58,376 short sales through the first nine months of 2012. KNOW THIS The GSEs have added 90 days to the allowable delay for Military Indulgence, effective for foreclosure sales on or after November 1, 2012. VISIT US ONLINE @ DSNEWS.COM FREDDIE���S NEW SHORT SALE PROCESS ���TAKING HOLD��� Freddie Mac���s Standard Short Sale program has been in effect for four months, and according to Tracy Mooney, SVP of SingleFamily Servicing and REO, ���Early results indicate that this program is beginning to take hold with homeowners and Realtors.��� In a recent blog post, Mooney said the program is expected to reduce short sale timelines by 50-75 percent. Under the new program, servicers have more responsibility and more authority. They are allowed a maximum of 30 days after receiving a completed short sale application to decide whether they will agree to the short sale. If a servicer must consult third parties before making the decision, they may take an extra 30 days to provide a decision. A final decision is required by day 60, at the latest, for all short sale requests, Mooney explained, and if the servicer surpasses the initial 30-day response window, weekly status updates must be communicated to the applicant. In order to ensure servicers are able to meet these shortened deadlines, Freddie Mac is now allowing them to approve short sales without consulting mortgage insurance companies. Both GSEs have obtained approval from nine mortgage insurers to permit servicers to forego their usual approval process in order to reach faster decisions on short sales. Both GSEs worked with the Federal Housing Finance Agency last year to establish short sale deadlines and streamline the process. 45 REPS. URGE OBAMA TO REPLACE DEMARCO The principal reduction debate resurfaced after 45 members of the House of Representatives���led by Reps. Elijah E. Cummings (D-Maryland) and John F. Tierney (D-Massachusetts)���sent a letter to President Obama last month, urging him to replace Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco with a permanent director. DeMarco was mainly criticized for his resistance to a loan modification pilot program that would ���examine whether a principal reduction program could reduce costs to taxpayers while helping borrowers stay in their homes.��� The letter points out that as part of the Emergency Economic Stabilization Act of 2008, Congress granted FHFA authority to modify mortgage loans through the ���reduction of loan principal.��� Rather than allow Fannie Mae and Freddie Mac to implement a principal reduction program, DeMarco has stood firmly against his critics, arguing principal reduction is not in the best interest of taxpayers and could create a ���moral hazard��� issue. To counter DeMarco���s reasoning, the letter points to a principal reduction pilot program developed by Fannie Mae and Citibank that was terminated due to ���operational��� challenges. Cummings and Tierney say they received documentation estimating the pilot would have cost about $1.7 million while benefits could exceed $410 million. ���By not supporting this pilot program��� even after the Department of Treasury offered funds to help cover its operational expenses��� Mr. DeMarco demonstrated that he is not interested in obtaining real-world evidence that might contradict his pre-established views,��� the letter states. The letter also argues FHFA���s plan to raise guarantee fees in high foreclosure states would ���penalize borrowers arbitrarily��� in places where many homeowners are facing foreclosures. ���FHFA proposed increasing state-level guarantee fees charged by Fannie Mae and Freddie Mac on new borrowers in the five states with the longest average foreclosure timelines,��� the letter states. Such an action, lawmakers argue, could ���unfairly punish borrowers��� without actually addressing the factors leading to longer foreclosure timelines. ���For these reasons, we strongly urge you to nominate an FHFA director who is ready to fulfill this mission and address the many challenges still facing the nation���s housing finance markets,��� the letter concludes. 21

• Cover