Sep
04

How the New Short Sale Guidelines Will Affect You

September 04, 2012

short saleWondering how the new Federal Housing Finance Agency guidelines will affect the Chicago new home market?

Here’s a quick rundown.

For the past couple of years, shadow housing inventory and government-held REO inventory has been decreasing. This is certainly good news, and the new FHFA guidelines could help those inventories decrease even more.

The new guidelines will go into effect November 1, and will combine existing short sale programs into one standard program that will include mortgages that are a part of the Fannie Mae and Freddie Mac programs.

Even homeowners who are current on their mortgage will be eligible to enter a short sale due to certain events such as divorce or legal separation, illness or disability, a distant employment transfer or death of a borrower or co-borrower.

In order to make the short sale application process more streamlined, homeowners will not need to deal with as many forms of documentation, even if their credit score is lower than 620.

Special privileges will also be given to military personnel who have Permanent Change of Station status. This means that military members who are relocated will automatically be eligible for a short sale.

Last fall, Fannie Mae and Freddie Mac implemented non-confirming loan limits on their mortgages, and it looks as if the new short sale program will also help to reduce inventory .

Do you think the new short sale guidelines are a good idea?

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Jessica Thom

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