Fannie, Freddie Streamline Short-Sale Approvals
Daily Real Estate News | Thursday, November 01, 2012
Beginning Nov. 1, Fannie Mae and Freddie Mac gave nine private mortgage insurers the ability to approve short sales and deeds in lieu of foreclosure for distressed home owners without requiring a separate review. The move is expected to reduce delays, costs, and uncertainty involved in processing short sales and deed in lieu, according to mortgage giant Freddie Mac.
Under the new agreement with the private mortgage insurers, the government-sponsored enterprises (GSEs) will allow the insurers to approve short sales or deed in lieu of foreclosure who have a Freddie or Fannie-backed loans without requiring a “separate and potentially time-consuming review” by the mortgage insurance companies, according to a news release.
"We applaud the nation’s mortgage insurers for committing to work with us and our servicers to help more borrowers obtain short sales and other foreclosure alternatives,” says Tracey Mooney, a senior vice president at Freddie Mac. “By paving the way for more borrowers to avoid foreclosure, today’s announcement will support the housing recovery and help reduce taxpayer losses."
The move is part of Fannie and Freddie’s effort to streamline the short-sale approval process. For example, the mortgage giants also recently announced they would be offering up to $6,000 to second-lien holders in order to expedite a short sale.
"Short sales and deeds-in-lieu are important tools to prevent foreclosures and help struggling borrowers," says Leslie Peeler, a senior vice president at Fannie Mae. "These delegation agreements create an even more streamlined process that will ultimately help more families avoid the costly effects of foreclosure and benefit taxpayers."
The nine mortgage insurers who no longer will need a separate review from the mortgage giants are: CMG Mortgage Insurance Co., Essent Guaranty Inc., Genworth Mortgage Insurance Corp., Mortgage Guaranty Insurance Corp., PMI Mortgage Insurance Co., Radian Guaranty Inc., Republic Mortgage Insurance Co., Triad Guaranty Insurance Corp., and United Guaranty Corp.
Sources: Fannie Mae, Freddie Mac, and “Mortgage Insurers Won’t Stand in the Way of Fannie and Freddie Short Sales,” Inman News (Oct. 31, 2012)