Fannie Mae Speeds Up Orlando Short Sales

Written by admin on 29 January 2009

Good news for Orlando area homeowners forced to sell their homes during this economic recession: The Federal National Mortgage Association, known as Fannie Mae, is trying a new pilot program to speed up the short-sale process. Orlando’s bargain housing market has passed Miami, Fort Lauderdale and Jacksonville in the number of homes sold in the past year, and Fannie Mae is hoping this new program will spur even more sales in this region. The program began in late December and is also being tested in Phoenix, Arizona.

As reported by Jerry Jackson of the Orlando Sentinel, Fannie Mae has already pre-approved 300 homes for short sale in 11 Central and Southwestern Florida Counties. Among those counties are Orange, Seminole, Lake, Osceola and Volusia. With only a small number of homes included in the pilot program, this won’t make a dent in the inventory of homes on the market, but a positive result would lead to expanding the volume of pre-approved houses and encourage other lenders to follow with a similarly aggressive program.

A short sale occurs when the lender determines the homeowner has a financial hardship and agrees to take less than what’s owed on the mortgage. Prior to Fannie Mae stepping in, lenders were reluctant to accept a reduction in the balance due and, with little incentive to act, would frequently wait two or three months before responding to a short sale request.

“Right now, short sales can take months and months until you get an answer back, and sometimes the answer is ‘We’re not interested.’ This program will cut through that,” said Marty Hunt, President of the Mid-Florida Regional Multiple Listing Service (MFRMLS) in his interview with Jackson.

MFRMLS which includes the Orlando Regional Realtor Association will assist the program by flagging homes pre-approved for short sale. This will alert member agents that these properties can be marketed for quick sale—a vast improvement over the slow, waiting game normally associated with a short sale.

Fannie Mae was able to speed up the short-sale process by researching the property and getting necessary clearances upfront. This eliminates many potential stumbling blocks that have wasted time and frustrated both sellers and buyers in the past. Having lenders decide early on what payoff amount they are willing to accept would allow inventory to sell more rapidly. “That’s crucial to turning this around,” Hunt said. It’s especially important in some of the newer subdivisions where 50 to 60 percent of sales are through foreclosure or short sale. A reduction in inventory coupled with a reduction in the number of days a home sits on the market could help stabilize home values and improve consumer confidence. Fannie Mae’s short-sale program is a win-win solution for struggling Orlando area homeowners.

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