October sizzling copy! No sugar from FICO for Frannie’s non-delinquent short sellers
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Will Frannie’s new program increase the rate of short sales in California?
- Yes. (63%, 86 Votes)
- No. (37%, 51 Votes)
Total Voters: 137
Fannie Mae and Freddie Mac (collectively Frannie) are requiring mortgage servicers to complete short sales under one uniform approval process, called the Standard Short Sale/HAFA II. Frannie expects this streamlined process will make short sales uniform, faster, easier and clearer. Under this new program:
- homeowners current on their mortgage payments will be eligible for a short sale if they meet other hardship criteria;
- Frannie will wave deficiency collection in exchange for a “cash contribution” from borrowers meeting specific financial guidelines (contribution not to exceed 20% of the borrower’s reserve funds or other assets);
- members of the military who are being relocated will be automatically eligible for the program; and
- Frannie will offer up to $6,000 to second lien holders to speed the short sale.
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loading...About The Author
Sarah Cantino
is lead editor for the Landlords, Tenants and Property Management and Real Estate Property Management books.
Latest CommentsLeave a Reply
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The simple truth is that if you are underwater and current on payments, meet a hardship that is required, you can short sale. However, now you are a tenant in a depressed inventory market. Which means you have to wait at least 2 years to try and qualify for a new purchase loan. Who really benefits ? The lenders and the investor (fannie freddie) benefit.
In some markets primarily coastal california seller’s markets are popping up. Because there is a reduced inventory, prices have spiked.
If the lenders and investors want to help waive the 2 year wait for current underwater homeowners and we will have a stable recovery and not a spiked market.
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You can offer and throw out all the new guide lines you want. But they become meaningless when the final decision maker to implement them, is left in the hands of the Lender and Investor note holder. A $6K payoff to the 2nd holding a $50K note-Ain’t gonna happen. If you really want to fix this mess, Talk to people on the street, in the trenches who have to deal with all of your B.S. band aid fixes everyday. I don’t care to participate, thank you very much. And neither do my clients.
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Here we go again. Much like the “programs” of the 2000 to 2006 era in which Fannie and Freddie lowered the down payment requirements to zero in many cases to appease the left, this new “program” produces more volume in the market by offering rewards to the irresponsible among us while at the same time making the realtors and appraisers and loan originators very happy from the increased sales volumes. As a landlord, this time it also put $$$$ in my pocket too. But no good will come of it.
I say bravo to FICO for not bowing to pressure from those groups who seek short term gains against the Country’s long term financial health.
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The bill that removed 750,000 wholesale brokers from the lending industry and replaced with more regs
and requirements for the retail mortgage brokererage, I think it is Dodd/Frank but could be different. needs
to be repealed. Also, the so called added jobs (more government oversight) Obama claims needs to be
eliminated. The wholesale lending industry was a check and balance of competitative shopping for borrower
but has been eliminated and more government intervention added. The Brokerage community has a few
bad ones just as the legal profession or medical community does too. Are we going to remove integral
parts of those professions as well. Maybe Obama will form more government jobs.
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Where does Frannie get the $6K? Tax payers money, since they have to be helped by the government. More inventory will lower prices of homes.
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Has everyone gone stupid?? Why would anyone (especially Brokers) allow their clients to do this? All a underwater homeowner in California has to do is stop paying and live in the house for a year or so rent/mortgage free until the bank gets around to filing proper papers as required by Calif law – Read – NO DEFICIENCY STATE – the only thing the bank gets is the security for the Trust Deed which is the ‘house’ for those of you in the above category, at what value it has, not your paycheck, not your bank account, not your future earnings, not your Unemployment Check, nothing else / read NO DEFICIENCY STATE). When they get around to filing for Foreclosure then just offer the bank to sell the house (short sale) for their (the banks) BENEFIT (Foreclosure will cost them much more). If they are not stupid (hummm) they will agree. If they don’t agree then tell them to pound sand and you will continue to live there until foreclosure is completed 6 to 10 months more of no rent/Mortgage payments. It doesn’t matter, any way your credit will take a hit either way!! You ain’t gonna be able to by back into the housing market anyway. So which sounds best to you??? Am I wrong ????
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