Yesterday we told you about banks beginning to offer cash and principal reductions for delinquent homeowners to do short sales rather than go into foreclosure. It seems like short sales are getting more and more press all of a sudden.
Earlier this week Freddie Mac said it will begin to offer larger incentives for mortgage servicers to complete short sales, as part of the Home Affordable Foreclosure Alternatives program. (HAFA is designed for homeowners who are in trouble, but who don’t qualify for a loan modification. It’s goal is to get them and their lenders to do short sales.)
“Borrowers and servicers may receive incentives for successfully closing a HAFA Short Sale or HAFA Deed-in-Lieu,” says Freddie. And soon those incentives will increase. By how much? To whom? Freddie hasn’t said. But the message is clear: Short sales are better than foreclosures.
Meanwhile, continuing the theme…
Over at The Mortgage Reports, Rob Chrisman writes that some major mortgage insurers have told Fannie Mae, ‘You don’t need our permission to do a short sale,” or as Chrisman writes, “Fannie Mae has been given the authority to proceed with a short sale or complete a deed in lieu of foreclosure by five mortgage insurers, without needing to secure their approval.”
Genworth, PMI Group, MGIC, Radian Guaranty, and Republic Mortgage Insurance, have all given Fannie Mae the authority to do the short sales on their behalf. That’ll speed the process up at least a little — and be another step to making short sales more appealing than foreclosures.