Some Minnesota homeowners who are behind on their mortgages and facing foreclosure may soon see changes in short sale options. The new rules issued by the Federal Housing Finance Agency will apply to the millions of U.S. homeowners whose loans are owned or secured by Freddie Mac or Fannie Mae and who are considering a short sale.
The new rules are meant to make short sales a more realistic option for homeowners. Currently, homeowners may receive an offer from an interested buyer only to have the bank take months to respond to the offer, at which time the buyer may or may not still be interested in the property.
Pursuant to the new rules, lenders will have 30 business days to respond to the offer and must issue a final decision within 60 business days. Lenders who cannot respond to the offer within 30 business days will be required to provide homeowners with weekly written updates about why the response is delayed and when a response is likely to be issued.
Short sales are increasing in the United States, according to RealtyTrac, as both homeowners and lenders seek alternatives to foreclosure. The hope is that these new regulations will decrease the amount of time it takes to close on a short sale.
Lenders who fail to comply with the rules will face financial and other penalties.
Our Minneapolis foreclosure attorneys hope that these changes bring some much needed relief to homeowners who are behind on their mortgage payments.