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Quick tips for Fannie Mae, Freddie Mac short sales

Knowing what happens during the short sale transaction with Fannie Mae or Freddie Mac can go a long way toward a successful transaction.

fannie mae

New Fannie Mae CEO named
Remember these guys? We often hear about Fannie Mae and Freddie Mac in the news, but not always with respect to short sale processing. However, when it comes to short sale processing, knowing whether a mortgage is owned by Fannie Mae or Freddie Mac is helpful for a number of reasons.

Here’s why:

  1. Six percent commission. Fannie Mae set the standard about four years ago, and said that they will pay a six percent real estate commission on short sale transactions. At that time, some lenders were chopping the commission to four percent, so agents were thrilled when that announcement came.
  2. Fannie Mae and Freddie Mac participate in HAFA. This means that short sale sellers who qualify for the HAFA program will get relocation assistance (cash at closing) as well as some of the other benefits of the Home Affordable Foreclosure Alternatives Program.
  3. Fannie Mae and Freddie Mac have strict guidelines as to how much can be allocated to other lien holders. Since some short sales have more than one lien that needs to be reconveyed at closing, it’s important for the first lien holder to be willing to contribute to junior lien holders. Fannie Mae and Freddie Mac are not always as generous when it comes to offering up big bucks to second lien holders. And, if you get a collection company or a Daddy Warbucks in the second position, your short sale may be headed in a not-so-fun direction.
  4. Fannie Mae and Freddie Mac now have new guidelines with respect to short sale response times. It is entirely possible that your short sale could be processed more quickly than you had originally anticipated.
  5. Fannie Mae and Freddie Mac don’t always postpone auction dates. Of all of the investors, Fannie Mae and Freddie Mac seem to be two of the toughest with respect to the postponement of preset foreclosure auction dates. So, if your short sale seller has a Fannie Mae or Freddie Mac-owned mortgage, you may want to give the seller fair warning.

Loan Lookup Tools

How do you find out whether your short sale seller has a mortgage that is owned by Fannie Mae or Freddie Mac? You use the loan lookup tools! Click on the links below for access to the Fannie Mae and Freddie Mac loan lookup tools:

The next time you take a short sale listing, don’t forgot to check whether the seller has a Fannie Mae or Freddie Mac loan right from the start of the short sale process! As you can see from my list above, knowing this provides a great window into what may happen during the short sale transaction.

Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


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