Regulator seeks speedier action on troubled US mortgages

Yesterday, the regulators of Fannie Mae and Freddie Mac announced new regulations intended to further streamline the short sale process.  In short, once a borrower submits a short sale package, the servicers has 30 days to give a decision.  However, it also states that if the servicer is unable to give a decision in 30 days, then it must provide the borrower with weekly updates and a final decision within 60 days.  Also, the regs do not become effective until June 15th, but they are encouraging servicers to start implementing now.

My feeling is that we aren’t going to immediately see 30 short sale approvals, but we are definitely moving in the direction of speeding up the process to 60 to 90 days.

Please see more detailed language below, as well as a link to an article.

Within five days of an evaluation decision, but no later than 30 days following receipt of a complete BRP [Borrower Response Package], the Servicer must provide to the Borrower an evaluation decision and send the appropriate Borrower Evaluation Notice in accordance with Section 64.6(d)(5).
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There may be some situations in which a Servicer will be unable to provide a decision within 30 days following receipt of a complete BRP (e.g., extended negotiations with the MI). In such cases, the Servicer must notify the Borrower within the 30 day time limit that the BRP is still under review and each week thereafter provide the Borrower a status update indicating the reason(s) why a decision is pending. The weekly status updates may be communicated verbally or in writing. However, the Servicer must provide the Borrower with a decision and send the appropriate Borrower Evaluation Notice no later than 60 days after receipt of a complete BRP.