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via: TheMortgageReports.com/Rob Chrisman
It is hard to pick up a newspaper without reading about short sales statistics, where borrowers owe more than the home is worth and, when it is sold, must have the lender accept the lower price. Short sales, which are often seen as a better alternative to foreclosure, till lag behind REO sales in numbers for Fannie Mae and Freddie Mac
With a short sale, typically, the mortgage servicer is contacted beforehand in order to give the okay for a short sale on properties secured with guaranteed loans, but it has been revealed Fannie Mae has been given the authority to proceed with a short sale or complete a deed in lieu of foreclosure by five mortgage insurers, without needing to secure their approval.
The latest mortgage insurer to give Fannie Mae the authority to proceed without waiting is the PMI Group, which only recently filed for bankruptcy last year.
PMI Group joins Genworth, Republic Mortgage Insurance Co., MGIC and Radian Guaranty in already granting authority to Fannie Mae. With less red tape to go through, Fannie Mae mortgage servicers should be able to step up the approval of short sales.
Buyers, Realtors, and mortgage bankers have all complained about the lengthy amount of time needed to complete a short sale. All of this fits with its wider plan to increase short sale completion rates and also boost the speed of the process. As part of these efforts, Fannie Mae has also distributed short sale processing software to numerous MLSs across the US.
Many in industry are happy about it, and wish it had happened years ago.
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