It has been estimated that there are more than 11 million homeowners who are delinquent in their mortgage payments. In such a situation, there are a large number of people who are facing foreclosure. The option of short sale is available to such delinquent borrowers. However, for the last few years, lenders were taking quite some time to approve as well as complete the short sale process. However, Feds are hoping that new timeline rules will change this and also speed up the short sale process.
What is the new timeline all about?
As per the new timeline, if your loan is owned or secured by the Fannie Mae or Freddie Mac, you can expect a response for your short sale request within the next 30 business days. The lender will send you his final decision no later than 60 days. If your lender is unable to give you any response with the first 30 days, the bank will be required to send you weekly updates letting you know where the holdups are and when they can get this resolved. Those banks or lenders, who don’t follow these rules, will face monetary and other penalties.
What are the experts saying about this new timeline?
Real estate agents and mortgage industry professionals are of the opinion that this mandatory timeline will help in speeding up the short sale process which have been so time taking earlier. This is a welcome change as per the regulators as well. Apart from this, the new timeline also offers certain other guidelines. These guidelines include:
- Borrower eligibility
- Property valuations
- Compensation for lenders holding second liens
- Mortgage insurance issues
Those real estate agents, who deal with short sales on a regular basis, are of the opinion that this timeline is a positive step in the right direction.