Short Sale Timelines

New timelines for Short Sales – but no penalties if time lines not met fyi

1. Evaluation of Borrower Short Sale Packet

• 3 days – notify client that their request has been received
• 5 days – determine what documents are missing
• 30 days – determine if they will allow short sale
• 60 days – prepare documents for client to sign
• Client has 14 days to accept or reject the agreement
• Optional 10-day extension at client’s request

2. Short Sale without Short-Sale Contract

• 10 days – Mortgage company must respond with approval or denial
• 5 days – Given to borrower to respond, if short-sale offer is made
• 10 days – If borrower makes a counter offer, Mortgage Company must respond in 10 days.

3. Pre-foreclosure Sale Received with Borrower Response Package

• 3 days – notify client that their request has been received
• 5 days – determine what documents are missing
• 30 days – respond with an approval; approval with conditions; deny; counter-offer; or still under review.
• 5 days – If the offer is “deny with counteroffer,” borrower to respond with decision of the counter offer
• 10 days – When client responds, must communicate response with counter offer.
• 30 days – If response is “still under review,” and extension of 30 days is allowed, however, mortgage company must give weekly status reports to borrower
• 60 days – From first request, servicers must respond with final decision
•  These are “business days” and not “calendar days.”

The new short-sale timeline process has changed effective June 25, 2012. Fannie Mae and Freddie Mac have introduced policies to expedite the pre-foreclosure sale process.

Now, mortgage servicers must follow the policies outlined for all conventional mortgage loans held in either agency’s portfolio. Servicers are “encouraged” to follow these requirements with respect to mortgage loans sold to either Fannie or Freddie, including FHA, VA and USDA loans they may have purchased.