-Freddie Mac expands servicer authority to approve more short sales.
M2 EQUITYBITES-August 22, 2012--Freddie Mac expands servicer authority to approve more short sales(C)2012 M2 COMMUNICATIONS http://www.m2.com
22 August 2012 -- U.S. mortgage funder Freddie Mac (OTC: FMCC) said 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.
The GSE said that 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 said it 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.
A short sale occurs when the sale price for a property is exceeded by the amount of the mortgage owed on it.
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