Background: In the housing market, a short sale occurs when a home is resold for less than the outstanding balance on the home’s mortgage. Either the seller has to make up the difference, or the lender has to write-off the short portion of the loan. Of course, most sellers aren’t able to make the lender whole, so either the lender bites the bullet or forecloses — hoping to sell the property at a higher price. That’s not likely these days either.
Ken’s Take: This is a good move by Fannie — reflecting the realities of the market. More posts this week on the mortgage market and Fed proposals re: foreclosures.
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Excerpted from AP, Fannie Mae tests ‘short sale’ program, January 9, 2009
Real estate agents nationwide have complained about how long it takes for a lender to sign off on a short sale, often derailing the deal and leading a homeowner into foreclosure.
So, Fannie Mae — the mortgage giant — is testing a new program aimed at reducing the number of foreclosures by pre-approving sales where homeowners sell houses for less than the amount owed on them.
The company will determine an acceptable listing price for a so-called “short sale” even before a buyer has been found.
Fannie Mae wants to make the short sale as fast and easy as possible so distressed homeowners can avoid foreclosure.
Full article:
ttp://www.businessweek.com/ap/financialnews/D95JTMFG1.htm
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January 14, 2009 at 9:17 am |
The company will determine an acceptable listing price for a so-called “short sale” even before a buyer has been found? Yeah that will work in a decling market! Come on!