FHFA Announces New GSE Short Sale Guidelines

12247_dollarsignhouse FHFA Announces New GSE Short Sale Guidelines The Federal Housing Finance Agency (FHFA) has announced that the government-sponsored enterprises (GSEs) are issuing new mortgage servicing guidelines designed to align and consolidate existing short sales programs into one standard short sale program.

The new guidelines, which go into effect Nov. 1, will permit homeowners with a Fannie Mae or Freddie Mac mortgages to sell their home in a short sale if they are current on their mortgage or if they have an eligible hardship. Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability, or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.

According to the FHFA, the new guidelines will allow servicers to accomplish the following tasks:

  • Offer a streamlined short sale approach for borrowers considered to be most in need of assistance;
  • Quickly and easily qualify certain borrowers who are current on their mortgages for short sales;
  • Offer special treatment for military personnel with permanent change of station orders; and
  • Consolidate existing short sales programs into a single uniform program.

Furthermore, Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes. The GSEs will also offer up to $6,000 to second lien holders to expedite a short sale.

‘These new guidelines demonstrate FHFA's and Fannie Mae's and Freddie Mac's commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,’ says FHFA Acting Director Edward J. DeMarco. ‘The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.’


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