The Federal Housing Finance Agency (FHFA) has announced new guidelines for Fannie Mae and Freddie Mac aimed at consolidating and streamlining short sale programs, making it easier for lenders to qualify homeowners and expanding eligibility to include homeowners who are current on their mortgage yet qualify for an eligible hardship. The changes go into effect Nov. 1, 2012.

The National Association of REALTORS® (NAR), which had worked with FHFA and Fannie Mae and Freddie Mac to create the guidelines, commended FHFA on changes that will allow more struggling homeowners qualify for a short sale and avoid defaulting on their mortgage.

“As the leading advocate for homeownership, REALTORS® know that when a family is absolutely unable to keep their home, a short sale is often the best option for homeowners hoping to avoid foreclosure,” said NAR President Moe Veissi in a news release. “REALTORS® appreciate FHFA’s efforts to increase the number of short sale approvals, which limit the losses incurred by homeowners, lenders, the federal government and taxpayers.”

FHFA outlines some of the new guidelines:

  • Offer a streamlined short sale approach for borrowers most in need.
  • Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales.
  • Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes.
  • Offer special treatment for military personnel with Permanent Change of Station (PCS) order.
  • Consolidate existing short sales programs into a single uniform program.
  • Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending.
  • Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale.

Click here for more details on the new guidelines from FHFA.