Agent Resource Center

News & Updates

Fannie Mae and Freddie Mac updates

1/18/2013

 

Fannie Mae and Freddie Mac announced changes to their servicing requirements for short sales. Please see below for some key changes that all parties involved in a short sale should be aware of. These changes apply to all Fannie Mae and Freddie Mac short sales; with an offer and without an offer.

 

  • Title Transfer requirement change:
    • The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.
    • After a 30 day period, and until 90 days from the date of the deed the buyer is further prohibited from selling the property for a sales price greater than 120% of the short sale price.

Note: The above restrictions will run with the land and are not personal to the grantee.

 

 

Below is an example on how to calculate the 120%

  • Purchase Price is $100,000.00

  • 120% of the purchase price would be $100,000.00 X 1.2 = $120,000.00

 

  • Relocation Assistance:
    • The borrower may be entitled to an incentive payment of $3,000 from Fannie Mae/Freddie Mac to assist with relocation expenses following successful completion of a short sale unless:
      1. The borrower is required to contribute funds or execute a promissory note.
      2. The borrower has Permanent Change of Station (PCS) orders and receives a Dislocation Allowance (DLA) or other government relocation assistance.
      3. The servicer has knowledge that the borrower is receiving relocation assistance from another source other than the servicer.

 

Note: If the borrower receives relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer, the difference in the relocation assistance amount up to the $3,000 incentive maximum may be provided. If the borrower will receive relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer and the amount is equal to or greater than $3,000, no relocation incentive will be provided.

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