{"id":1991,"date":"2010-01-12T18:27:31","date_gmt":"2010-01-12T23:27:31","guid":{"rendered":"http:\/\/www.DuncanWierman.com\/content\/?p=1991"},"modified":"2010-01-13T15:46:52","modified_gmt":"2010-01-13T20:46:52","slug":"fannie-mae-short-sale-guidelines","status":"publish","type":"post","link":"https:\/\/www.duncanwierman.com\/content\/fannie-mae-short-sale-guidelines\/","title":{"rendered":"Fannie Mae Short Sale Guidelines"},"content":{"rendered":"<p style=\"text-align: justify;\">Have you ever wanted to know the rules the loss mitigator is following when you are negotiating a short sale? Here&#8217;s the rules from Fannie Mae that should be very enlightening if you take the time to read them.<\/p>\n<p style=\"text-align: justify;\"><strong>NOTE<\/strong>: These are merely guidelines and because a lender has a guideline does not mean it has to be followed.<\/p>\n<p><!--more--><\/p>\n<hr \/>\n<p><strong>FNMA  Short Sale<\/strong><\/p>\n<p>Introduction:<\/p>\n<p>The purpose of these procedures is to complete a successful short sale workout in accordance with FNMA Federal National Mortgage Association guidelines.<\/p>\n<p>References<\/p>\n<blockquote><p>1\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  FNMA \u2013 Home Savers  Solution Network<br \/>\n2\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 FNMA Delegated Schedule of  Authority<br \/>\n3\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mi Companies Work Rules<\/p><\/blockquote>\n<p><strong>Mortgagor  Qualifications<\/strong><\/p>\n<p>When you are qualifying the mortgagor, it\u2019s important to review the financial information on file to determine whether or not the mortgagor has experienced a verifiable loss of income or increase in living expenses. The following information is reviewed to make this determination:<\/p>\n<ul>\n<li> <strong>Current<\/strong> <strong>POI Proof of Income<\/strong> should not be older than 60 days for  all sources:<\/li>\n<li><strong>Pay stubs<\/strong>: Pay stubs<em> must<\/em> be legible and  include the mortgagor name or Social Security Number, pay dates, rate, and  deductions.<\/li>\n<li><strong>Profit and Loss<\/strong>:<em>Must<\/em> be for the last 90 days, signed, and dated by the preparer.<\/li>\n<li> <strong>Rental<\/strong>: Need a signed and dated letter from  the renter or a lease agreement including payment frequency and amount.<\/li>\n<li><strong>Non-Obligor income<\/strong>: If the non-obligor is contributing to the household with his income, need a signed and dated letter stating how much is being contributed monthly from the non-obligor.<\/li>\n<li><strong>Child Support<\/strong>: Need a copy of the child support order or letter from the person paying child support that states the amount and how often it is paid.Need copies of three months worth of  bank statements if direct deposited from the state disbursement unit.<\/li>\n<li> <strong>Social Security<\/strong>: Need current copy of award letter or  if direct deposited.<\/li>\n<li> <strong>Reason for Default<\/strong> \u2013 You need a brief explanation indicating cause of delinquency. Verify the mortgagor had a decrease in income and\/or increase in expenses that caused the delinquency.This can be a separate letter or on  the space provided on the Financial Worksheet.<\/li>\n<li> <strong>Completed Financial Worksheet<\/strong>: Completed, signed, and dated by all  mortgagors.This is only necessary if the  financial information on DLQ3 has not been updated in the last 30 days.<\/li>\n<li> <strong>Credit Report<\/strong>:<em>Must<\/em> be pulled within the last 90 days.<\/li>\n<\/ul>\n<p><strong>Order Appraisal<\/strong> \u2013 When the appraisal is completed, you  must complete three steps before the mortgagor(s) are considered for a short  sale.<br \/>\n&#8211; Qualify the mortgagor<br \/>\n&#8211; Qualify the property<br \/>\n&#8211; Qualify the sales contract<br \/>\n<strong><br \/>\nQualify the Mortgagor<\/strong><br \/>\nThe Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li>Calculate all qualifying  income.<\/li>\n<li> Verify the expenses on the Financial  Worksheet.The reason for default is due to a  verifiable increase in expenses or decrease in  income.<\/li>\n<li> If the expenses are greater than the  income, proceed with qualifying the property.If the expenses are less than the income, the mortgagor may qualify for a retention option. Redirect the file to the FNMA Retention team. Also, if there is a positive cash flow you may want to ask the borrower to make a cash contribution or sign a promissory note.<\/li>\n<\/ol>\n<p><strong>Qualify the Property<\/strong><\/p>\n<p>Property may be occupied or vacant. Most MI insurers request 91% of the \u201cas is\u201d appraised value; FNMA requires 90% of the \u201cas is\u201d appraised value.<\/p>\n<p><strong>Qualify  the Sales Contract<\/strong><\/p>\n<p><strong>Sales Contract<\/strong><\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Make sure the contract is executed by all  parties.<\/li>\n<li> Counter the offer to the FMV Fair Market Value (appraised value).The contract must have a closing  date.<\/li>\n<li> Have any \u201cand\/or assigned\u201d clauses  removed from the contract.\u201cAnd\/or assigned\u201d clauses cannot be included in the sales contract. This clause means they can place the deed in someone\u2019s name other than the listed buyers which could violate HUD\u2019s <em>Arm\u2019s Length Policy<\/em>.<\/li>\n<li> Have the contract addendum and listing  addendum signed by all parties.<\/li>\n<\/ol>\n<p><strong>HUD 1 or Net Sheet<\/strong><\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Verify all seller closing costs are  normal and customary.<\/li>\n<\/ol>\n<ul>\n<li>Realtor commissions do not exceed 6 percent of the sales  price.(6% if 2 realtors are involved; 3% if 1 realtor is involved)<\/li>\n<li> Sales price on the HUDI matches the  sales contract.<\/li>\n<li> The net proceeds are at least 90 percent of the appraised  value &amp; 91% for most Mi Co.<\/li>\n<\/ul>\n<p><strong>Cost Analysis<\/strong><\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Verify outstanding foreclosure fees and  cost.<\/li>\n<li> Run the cost analysis (Be sure to include the outstanding f\/c attorney fees &amp; costs &amp; the appraisal fee). Submit the presale through HSSN to obtain approval on non-delegated deals. Wait to obtain approval from the investor &amp; Mi Co before issuing out the approval letter.<\/li>\n<\/ol>\n<p><strong>Issue  Approval<\/strong><\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Make sure the Approval letter contains  the following:<\/li>\n<\/ol>\n<ul>\n<li>The buyer(s) and seller(s) names on it.<\/li>\n<li> The date of the sales contract.<\/li>\n<li> The estimated closing date.<\/li>\n<li> The approved closing costs.<\/li>\n<\/ul>\n<p><strong>Steps  to Follow Prior to Closing<\/strong><\/p>\n<p>The title company or closing attorney will need to provide the estimated final HUD Housing and Urban Development I for approval.<\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Fax the approved HUD I and Attachment F  back to the closing title company or closing attorney.<\/li>\n<li> Complete Attachment G.<\/li>\n<\/ol>\n<p><strong>Steps  to Follow After Closing<\/strong><\/p>\n<p>The Liquidation negotiator  will\u2026<\/p>\n<ol>\n<li> Verify you have received the net proceeds  check, HUDI signed by all parties.<\/li>\n<li> Make sure the proceeds check and the net  amount on the HUDI match or funds wired confirmation.<\/li>\n<li> Make sure the disbursement date on the  HUD1 matches the check date.<\/li>\n<li> Forward the complete file to Settlement  along with the Settlement Checklist.<\/li>\n<\/ol>\n<p><strong>Removals\/Denials<\/strong><\/p>\n<p>The mortgagor(s) may be  terminated from the Pre Sale program for the following reasons.<\/p>\n<ul>\n<li> Un-resolvable title issues.<\/li>\n<li> The mortgagor did not market the property at FMV to  obtain an offer.<\/li>\n<li> Voluntary withdrawal by the mortgagor(s).<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Have you ever wanted to know the rules the loss mitigator is following when you are negotiating a short sale? Here&#8217;s the rules from Fannie Mae that should be very enlightening if you take the time to read them.<\/p>\n<p>NOTE: These are merely guidelines and because a lender has a guideline does not mean it has to be followed.<\/p>\n","protected":false},"author":939,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[303],"tags":[],"_links":{"self":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/1991"}],"collection":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/users\/939"}],"replies":[{"embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/comments?post=1991"}],"version-history":[{"count":4,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/1991\/revisions"}],"predecessor-version":[{"id":2155,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/posts\/1991\/revisions\/2155"}],"wp:attachment":[{"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/media?parent=1991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/categories?post=1991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.duncanwierman.com\/content\/wp-json\/wp\/v2\/tags?post=1991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}