For the last three months, Freddie Mac’s new short sale process has been in effect. It wasn’t until recently, though, that many people began to understand how the new short sale program is different. Now, borrowers have more freedom to pursue a short sale, and the onus has been put on loan servicers to complete the short sale process in 50-75% less time.
A new 30-day timeline has been put in place for loan servicers, and they must issue a decision on a short sale application during this window. As a result of the change, lenders are now being given more flexibility to review applications from clients who are interested in short sales and make decisions.
Freddie Mac has involved itself in the short sale process and established this new program because they say it was simply taking too long with the old way. After obtaining approval from nine mortgage insurers to allow servicers to skip the normal approval process in order to reach a quicker decision about short sales, lenders can now move ahead without consulting these companies.
If a mortgage servicer runs past the initial 30-day window, consistent communication with the applicant, which includes weekly updates, is required.