Fannie Mae Changes Guidelines to Speed up Short Sale Times

Anyone who has ever attempted a short sale has probably been frustrated by the amount of time it can take to get a response from the bank.  To help combat absurd response times, Fannie Mae has issued new guidelines that should at least provide Realtors, borrowers, and buyers with an expectation of when the bank will respond.

But first, let’s look at just how bad the problem is.  RealtyTrac recently documented the average time it takes to close a short sale with some of the nation’s biggest lenders, and published some of the findings.  Here are some of the results:

Lender Jan. 2012 Days to Close
Fannie/Freddie/FHA 193 days
Ally Financial 321 days
PNC Financial Group 353 days
Wells Fargo 385 days
Bank of NY Mellon 402 days
Bank of America 403 days
Sun Trust 404 days

 *** Days to close calculated as the time from the start of foreclosure until the property is sold as a short sale.

Isn’t it interesting that the GSEs (Government-sponsored enterprises) have the fastest turnaround time?  And so it’s only fitting that Fannie Mae would issue new guidelines for short sales on mortgages backed by Fannie and Freddie.  That’s right…beginning June 25, 2012, real estate agents and borrowers can expect to receive a decision on a short sale in 30-60 days.

Specifically, the servicer must respond to the offer within 30 days.  Keep in mind that the offer must be part of a complete short sale package.  The response must be one of the following:

  • approve,
  • approve with conditions,
  • deny with counteroffer, or
  • “still under review.”
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