6 Tips to Expedited Freddie Mac Short Sales

From the Miami Herald, "In the third quarter of this year, Freddie Mac repossessed 24,385

REASONS FREDDIE MAC SHORT SALES WON'T CLOSE:


1. Freddie Mac does not pursue deficiency judgements, however, they will not put that in writing . (Why not? Quite often short sales don't close because the Lender requires a cash contribution from the Seller which he, the Seller, is only willing to give if the Lender waives the deficiency). You can call Freddie Mac and they will tell you , ON THE PHONE, VERBALLY , that they don't pursue deficiencies, but they won't put it in writing!!!!!
2. Freddie Mac will only pay 10% to the junior liens with a $6000 cap. More often than not, the second Lenders require much more than that and the only way the short sale goes through is if the Seller or the Buyer pay the premium the second lender is requiring. Freddie Mac will not allow anyone to pay a greater amount to the junior lien holder. This will put an end to many short sales. Anyone paying additional monies to the junior lien holder will be committing a RESPA violation and mortgage fraud!!

3. Freddie Mac will not allow anyone to pay a large Homeowner or Condominuim Association balance. I believe the rule is one year or 1% of the mortgage amount. The majority of short sales we are closing have large Association balances which are being paid by the Seller or the Buyer or they cannot close. Homeowners and Condominuim Associations in Florida can be very difficult to deal with. Quite often they would rather foreclose before the Lender if they cannot collect a full payoff that includes late fees, interest, and attorney fees! More often than not, these deals only close when the Buyer or Seller pay these huge delinquincies!!!

4. If the investor is Freddie Mac, make sure you submit it for HAFA before you have an offer. Once you have an offer it is too late to apply for HAFA! This means as soon as you take a listing, find out who the investor is before you market the property!
5. If the only thing the borrower has defaulted on is their Freddie Mac loan, this is not viewed favorably by Freddie Mac. This is a red flag that the borrower is not experiencing a true hardship and their short sale will be subject to stricter scrutiny.
6. When working with a Freddie Mac loan, ask the servicer if they have delegated authority.(They are able to make decisionsons on their own without going back to the investor). Chase, Wells Fargo and Bank of America have delegated authority on 78% of these loans under a certain amount. What is that amount? I don't know, they wouldn't tell us! How helpful!
Is it any wonder that Freddie Mac, who owns nearly 60,000 properties nationwide, only cut it's inventory by 1000 homes this last quarter? With guidelines this strict they will not be cutting their inventory and the majority of its properties will go into foreclosure. Given their strict guidelines, it will be very difficult to short sale their properties!!!

Before you undertake negotiations on a short sale where the investor is Freddie Mac, find out if there is a large HOA or COA balance and determine what the junior lien holder requires before wasting your time,



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