New 30 Day Rule for Short Sales
As of June 15th, a new Fannie/Freddie guideline will take effect in how short sales are sold. While short sales aren’t a huge part of our market, you should still know what this means and how it changes the game. Here’s the outline for the upcoming changes:
- Banks now must respond with 30 days. If they need more, they can take up to 60 days IF they provide weekly updates to everyone. A final decision must be rendered by day 60.
- The 30 day clock starts when the borrower (the seller) submits a short sale offer from a buyer and completes a response package.
- If the short sale is under the government’s Home Affordable Foreclosure Alternative (HAFA) program, the 30 day clock starts when the borrower (the seller) submits the completed package requesting consideration of a short sale to the bank.
- If the bank makes a counteroffer, the borrower (seller) has 5 business day to response, then the bank has 10 business days to respond.
Now, that sounds great in theory. Wouldn’t it be nice for everyone, especially the sellers, not to have to drag their feet for 6 months waiting for a bank response? Here’s the one (fatal) flaw of the new guideline: There is no mention of any repercussions for failing to meet the 30 (or 60) day deadline. It’s possible this may change in the future, but as of right now, that’s where we stand. So we can hope for the best, but likely there will be an adjustment period for everyone involved as they roll out this new policy.
For a complete list of available short sales in Arlington, click here.