Nov
08

New Short Sale Guidelines Are in Effect

November 08, 2012

new short sale guidelines affect chicago real estateIt’s time to get out your “easy” button because it’s now easier than ever to be approved for a short sale property. On November 1, Fannie Mae and Freddie Mac enforced a new guideline that would allow nine private mortgage companies to approve short sales and deeds without a separate review by the insurer.

The new guidelines will help minimize costs, delays and uncertainty as often times the additional review involves lengthy and expensive court proceedings. If the new guidelines speed up the short sale process, it will encourage potential real estate in Chicago buyers to purchase more of these distressed properties, thus taking them off the market more quickly.

Another new guideline allows borrowers who can prove certain hardships to qualify for a short sale even if they are current on their mortgage payments. The specific hardships include: divorce, disability, the death of an owner and the need to relocate to a job more than 50 miles away.

Fannie Mae and Freddie Mac have also waived their right to go after borrowers for “deficiency,” which is the portion of the loan that has yet to be paid after a home sale. Under the new guidelines, a borrower will have to pay part of the remaining deficiency or sign a contract that promises they will pay some of the remaining amount.

What do you think of the new guidelines?

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