A Critique on Freddie Mac’s Communication Time Lines for Short Sales

As an active Realtor and lead short sale negotiator for my Studio City, California-based Real Estate company, I was very pleased to read the short sale bulletin posted 4/17/2012 by FreddieMac.  Within said press release, Freddie Mac outlined several short sale review parameters and time line requirements which “should allow more efficient processing of short sale requests”.  Having played the role as lead negotiator on over 200 successful escrow closings since mid-2009, I have been exposed to the full gamut of short sale trials and tribulations.  Above all else, it is the extremely long review times [usually translating into buyer dropouts] which can be most detrimental to short sale successes.  As such, I applaud Freddie Mac for raising the bar on their own accord and self-implementing higher standards for their short sale reviews, HAFA and traditional alike.

But are we getting a bit ahead of ourselves in celebrating Freddie Mac without statistical evidence demonstrating enhanced short sale processing?  I ask that you all read the same Freddie Mac bulletin from 4/17/2012 again, and this time do so with a fine-tooth comb.  Like a verbal scavenger hunt, I put you all to the test of identifying the red flag phases which create gaping loopholes for Freddie Mac Servicers to potentially under-deliver without recourse consequences.   Refer to the blog attachment to see if you found the same red flags as I did.  

Strategically-placed phrases like “if feasible” and “there may be some situations in which the Servicer will be unable…” afford each and every Freddie Mac Servicer an out should short sale reviews stray off course. Even the author of the bulletin, Tracy Hagan Mooney, questions the effectiveness of these time line amendments when she states that such innovations “should allow more efficient processing”.  Why does Tracy not definitively state that we will  see improvement, I ask myself.  Don’t get me wrong ; I always try to act the optimist and be a glass-is-half-full guy.  However, I’ve learned enough in the Loss Mitigation world not to count my chickens until they’ve hatched.  Let us see how the new improvements translate in Real World short sale cases, and perhaps 12 months from now we’ll look back at this 4/17/2012 bulletin as the compass that righted this wayward ship.   

Until next time…..