Beginning June 15, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, will require both agencies to give short-sale buyers a final decision within 60 days.
Making sense of the story
- Under this same guideline, Fannie Mae and Freddie Mac also must respond to initial requests for a short sale within 30 days of receiving the buyer’s submission.
- According to one analyst, expedited sales as a result of the new directive will benefit the entire housing market. They could also remove some risks for buyers – many of whom previously had to wait months for a decision and then ended up not getting the house they wanted.
- Lenders favor short sales because they are less costly and more efficient than foreclosures. Yet the homeowners, trying to exit as gracefully as possible, never know how long the process will take or how badly their credit will be hurt.
- Both short sales and foreclosures remain on the credit report for seven years, but foreclosures don’t appear until the legal paperwork is filed, and that could take months.