On November 1, 2012, Fannie Mae and Freddie Mac’s new self-imposed short sale guidelines will go into effect, rules which will make the short sale process easier and quicker for qualified borrowers.
The guidelines are a commitment to “enhancing and streamlining the process to avoid foreclosure and stabilize communities,” said FHFA director Edward DeMarco. Additionally, DeMarco also stated that the new short sale program will provide relief for underwater borrowers who need to relocate more than 50 miles for work.
Borrowers who are more than 90 days delinquent and who have a credit score lower than 620 will no longer be required to provide documentation of hardship. Government-Sponsored Enterprises (GSEs) will also waive the right to pursue deficiency judgments. Borrowers who are not yet in default will still qualify for a short sale if they are facing certain hardships, including death of co-borrower, divorce or legal separation, illness or disability, or distant employment transfer.