Short Sale Soundoff: Fannie, Freddie change Requirements for Short Sales

Fannie Mae and Freddie Mac announced changes to their servicing requirements for short sales. Please be aware of the following key changes for all parties involved in a short sale. 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 percent of the short sale price.

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

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:
• The borrower is required to contribute funds or execute a promissory note.
• The borrower has Permanent Change of Station (PCS) orders and receives a Dislocation Allowance (DLA) or other government relocation assistance.
• 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.