Recent articles about short sale strategic default of vacation home and investment properties, like those in Destin Florida, have caused a stir. An October 2012 Federal Housing Finance Agency (FHFA) report stated that Fannie Mae and Freddie Mac, which are enterprises it oversees, don’t uniformly pursue collection of short sale deficiencies. A deficiency is the balance of the mortgage note that was not paid after a short sale or foreclosure. The audit, FHFA’s Oversight of the Enterprises’ Efforts to Recover Losses from Foreclosure Sales addressed “strategic default”, which is when a borrower allows a foreclosure to occur (walks away) or perhaps does a short sale without a true hardship.  In these cases, there could be better collection efforts and recoveries of deficiency balances, according to the audit.

The report suggested that FHFA will provide future guidance in the deficiency collection process to Fannie Mae and Freddie Mac to get substantial monies recovered.  Corrective action planned per the report to better oversee and collect deficiencies would be based on these criteria, among others:

The audit stated “FHFA would not encourage the Enterprises (Fannie Mae and Freddie Mac) to pursue all borrowers including those unable to pay….”

Sellers who have completed short sales, for example, in resort towns like Destin Florida or Santa Rosa Beach, and have not received a waiver of deficiency may be pursued in the future. If you choose to do a short sale without a waiver of deficiency or “walk away” from a mortgage through foreclosure, you should consult with an attorney first.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Destin Florida Short Sale Help

Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects of short sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more.  She is also co-founder of www.ShortSaleSuperstars.com and short sale instructor to agents across the United States. Wendy Rulnick sells real estate in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Panama City Beach, Eglin AFB, Hurlburt Field.

I get many calls from sellers who need or want to short sale, but they are not behind on their mortgage payments. There are various reasons for this – they don’t want to affect their credit, their personal sense of responsibility, or sometimes they can still afford the payments although they are very “upside down”. For those who are current on their payments, but cannot afford them, I’ve seen some sellers max out their credit cards,  wipe out their 401K and retirement savings, work three jobs, or put their entire financial future in jeopardy. But whatever the situation, many will now be helped by new short sale guidelines announced  by The Federal Housing Finance Agency (FHFA) that take affect November 1, 2012. The FHFA is setting new short sale standards for Fannie Mae and Freddie Mac that will not only help “current” borrowers facing short sale, but speed up the process in general and give special U.S. military member consideration.

Here are the situations where a borrower does not have to be behind in their mortgage payments for Freddie Mac or Fannie Mae loans to be approvable for short sale:

1.       Divorce

2.       Death or borrower, co-borrower or household contributor

3.       Disability

4.       Job loss

5.       Increased household expenses (like gas, taxes, homeowners insurance, new baby)

6.       Business failure

7.       Natural or man-made disaster (think B.P. oil spill)

8.       Relocation for new work or job transfer of more than 50 miles, including military PCS

One fabulous change is that U.S. military , such as Eglin Air Force Base or Hurlburt Field airmen, who must relocate to a new base, (called PCS or Permanent Change of Station), will not be required to contribute to the deficiency balance after a short sale, which is the difference between the sales proceeds and remainder on the note, if the property was purchased before June 30,2012. (Military homeowners often use VA home loans, so this may not apply to many of them. In those cases, see my VA Compromise Sale articles.) Others, however, may be required to make a cash contribution if they are current on their mortgage and show the ability to do so, in order to get a waiver of deficiency.

To expedite short sale approvals, here are a few more guideline changes that should save time:

1.       Fannie Mae and Freddie Mac will offer junior liens $6000 to allow the short sale, instead of looking at individual cases.

2.       Borrowers who are behind on their mortgage payments, have poor credit scores and a hardship will not be required to provide as much financial documentation as a regular short sale.

3.       Response time from the lender initially must be within 30 days, with weekly reports thereafter.

These Fannie Mae and Freddie Mac short sale changes go into effect on November 1. If you need to short sale, take action now. Need help? See the resources below:

Military PCS: call 1-877-MIL-4566 or 1-800- FREDDIE.

Freddie Mac and Fannie Mae loan look up:

http://www.FannieMae.com/loanlookup or call 1-800-7Fannie

http://www.FreddieMac.com/corporate or call 800-Freddie

Wendy Rulnick, Broker, itswendy@rulnickrealty.com Call or email me if you need to short sale in Florida in Destin, Sandestin, Crestview, Fort Walton Beach, Navarre, Miramar Beach, Niceville, Rosemary Beach, Santa Rosa Beach, Freeport and Vicinity.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Emerald Coast Short Sale help

Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects of short sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more.