Real Estate Marketing & Beyond
Short sales are set to speed up from the beginning of next month, with new FHFA guidelines set to come into force on June 15. Under the new guidelines, Fannie Mae and Freddie Mac will be required to give a final decision on any short sale within 60 days of the homeowner’s request.
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Experts say that the new, streamlined short sales process should give housing markets a boost. One of the biggest flaws with short sales is the time it takes to get a final decision from the lender, with numerous buyers deciding to pull out of the deal rather than endure months of uncertainty.
The new guidelines come at a time where short sales have picked up a lot of steam, with many lenders deciding that they are now more preferable to a foreclosure, as there is less paperwork to get through and the costs often amount to less. In some parts of the US, short sales are actually more common than foreclosures. According to March data from CoreLogic, short sales represent just over 14% of all home sales in the country.
Michael McHugh, of the Empire State Mortgage Bankers Association, told the New York Times that faster short sales would do much to speed up a recovery in those states which use the judicial foreclosure process. Foreclosure cases in some states, such as New York for example, can take over a year before they make it to court.
With short sales set to be over and done within just two months, it’s thought that many defaulting homeowners will now view them as a much better option
“We should see a significant improvement in turnaround,” said McHugh in regard to those states that employ a judicial foreclosure process.
