SHORT SALE CODING CORRECTION ON CREDIT WILL TAKE EFFECT NOVEMBER 2013.
For some time now, many short sellers were treated the same as homeowners that foreclosed when applying for a mortgage. Due to a credit coding issue that lumped short sellers into the same category as a foreclosure, the waiting period for loan approval was extended substantially. This forced millions to put their dream of participating in homeownership again off to the distant future. With interest rates climbing, and the real estate market improving, the increased future cost for purchasing would seem more of an obstacle down the road.
But new policy changes could bring more options starting in November. After Sen. Bill Nelson focused on bringing this coding error to the FTC and the Consumer Financial Protection Board, things started to change.
“This is the nature of the evolution of this business,” says Fannie Mae spokeswoman Keosha Burns. The agency will input the new software into its computer system on Nov. 16. After that, if a short sale is marked as a foreclosure, the new code will allow the loan servicers to bypass it, correct it and move forward with the loan. Short sellers should speak with their bankers about the new options for homeownership, what the qualifications will be, and whether the state of their credit needs improvement.
PLEASE CALL TRACY BECKER:
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