On June 19, Fannie Mae issued a Servicing Guide Announcement (SVC-2013-13) that illustrated several upcoming policy changes. According to the announcement, Fannie Mae intends to update standard short sale/HAFA II and mortgage release requirements. Owners intent on conducting a short sale, or those who have a loan from Fannie Mae, should familiarize themselves with the changes that took place on August 1st. On the surface, the recent announcement appears to be another set of guidelines for mortgage servicers.
According to the Servicing Guide Announcement, policy changes will affect the following:
- Multiple listing service requirements for standard short sale/HAFA II
- Credit report seasoning for standard short sale/HAFA II
- Streamlined documentation requirements for transition from standard short sale/HAFA II to Mortgage Release
- Property inspection requirements for Mortgage Release
- Submitting the REOgram and subordinate lien releases
- Title insurance requirements for Mortgage Release
However, the most controversial of these policy changes appears to be the length in which agents must list a property on the MLS. The Fannie Mae Announcement discusses minimum lengths of time in which a property should be offered for sale on the Multiple Listing Service. It reads as follows:
On or after August 1, 2013, all properties being considered for a standard short sale/HAFA II must be listed with an active status on a multiple listing service (MLS) for a minimum of five consecutive calendar days, including one weekend (i.e., Saturday and Sunday), prior to the servicer submitting the standard short sale/HAFA II recommendation to Fannie Mae for review, or approving the standard short sale/HAFA II.
The property must be listed on the applicable MLS, which covers the geographic area in which the property is located and a printed copy of the property’s MLS listing must be kept on file. If a property is located in an area that is not covered by an MLS, the property must be advertised in a manner customary for that real estate market for at least five consecutive calendar days, including one weekend.
Fannie Mae’s intentions remain unclear to many in the industry. Accordingly, it is not uncommon for a property to spend five days on the market before it begins to receive offers. Five days is standard for the average agent to begin entertaining offers, negotiating terms and selecting the best offer available. In fact, requiring the listing agent to put the property on the MLS may bring offers higher than an offer that the agent obtains through a pocket listing.