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Short sale tip of the week

August 2, 2010

Submitted by Jim McNinch of Trademark Loss Mitigation

It’s not as easy as it used to be to request that the bank postpone a foreclosure on a short sale property. It seems that more lenders are standing firm on their foreclosure deadlines. 

Faced with the recent economic struggles, banks appear to be wisening up to the wily strategies we use to stall foreclosure dates. In response, those deadlines are no longer leaving us a lot of wiggle room.

This has become especially true if you’re working on a short sale with a Fannie Mae or Freddie Mac loan. This year, the two released a policy shift stating that all short sales must close by the foreclosure date, no matter how much work you’ve already invested in the process.

In some cases, as specified in the short sale approval letter, they must close even sooner.

How do I know this? This month we had two short sales with different lenders with acceptable contracts in the final stages of negotiations with the lender. Both were Freddie Mac loans. The foreclosure dates on both had been postponed once during the short sale process. We were told on both that the foreclosure date would not be postponed by Freddie.

So, what to do?

Two question you must ask are: 1) has the borrower missed any payments? and 2) has the foreclosure process already started?

Because of the strict guidelines, find out immediately whether you are working with a Fannie or Freddie property. Click these links to figure this out:

For Frannie Properties, Click Here

For Freddie Properties, Click Here

This is a vital piece of information o figure out before you decide to head into a long and stressful negotiation that may fall flat inches before the finish line.

If the borrower has fallen behind, the mortgage belongs to Fannie or Freddie, and a foreclosure has begun, it’s likely that the rest of the short sale transaction is not practical or possible.


Connect with Trademark Loss Mitigation:

Jim McNinch

Ali Kennedy

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