Freddie Mac Expands, Streamlines Servicer Authority to Approve More Short Sales
Freddie Mac (OTC: FMCC) recently announced it is streamlining its policies and processes so all Freddie Mac servicers can approve short sales for borrowers facing sudden financial stress due to divorce, death, disability or other common hardships on their own authority. Additional changes will also make it easier for servicers to process short sales for members of the armed forces receiving Permanent Change of Station orders. The new short sale policies were developed as part of the Servicing Alignment Initiative at the direction of the Federal Housing Finance Agency and are scheduled to take effect on November 1, 2012.
Freddie Mac is delegating greater authority to all of its servicers to approve short sales for many borrowers who are not delinquent but face the following common financial hardships: divorce, a family death, long-term or permanent disability, employment transfers to different parts of the country, or Permanent Change of Station orders for members of the armed forces.
Borrowers facing one of these hardships do not have to be delinquent to be approved by their servicer for a short sale.
Freddie Mac's new streamlined guidelines provide greater flexibility for servicers processing short sales for service members with Permanent Change of Station orders, including the elimination of back-end debt-to-income ratios or a cash contribution promissory note.
"These changes will make it clear that Freddie Mac servicers have the authority to approve short sales for more borrowers facing the most frequently seen hardships,” says Tracy Mooney, Senior Vice President, Single-Family Servicing and REO, Freddie Mac. “These changes will further empower the industry to minimize foreclosures and help Freddie Mac in its mission to minimize credit losses and fortify a national housing recovery."
For more information, visit www.FreddieMac.com.