COMMITTED: Freddie Mac aims for 75% reduction in short-sale timelines
In speaking with a source earlier today, one who is now completely out of the REO investments space, he remarked, "REO is a dying business."
It's a development he seems happy with and added, "there is no positive reward [to doing REO], it's always a regrettable situation."
It's a sentiment shared by the industry, which by and large supports short sales as a foreclosure alternative. It's a process that needs to move faster to gain support — these deals used to be painfully slow only a few years ago. Still, progress is being made, and future projections on timelines are pretty big.
Freddie Mac EVP Tracy Mooney put up a blog today, titled The Shorter Short Sale. In it, she outlines steps the government-sponsored enterprise is taking to streamline short sales.
"We estimate that the time to complete a short sale will decrease by approximately 50% to 75%," as a result of the changes, Mooney writes.
Short sales are, in large part, a commitment with the borrower's personal situation taken into consideration. It is rumored to help keep the credit score more intact, though that's a topic of some debate, but there are numerous other benefits.
For example, homeowners can qualify for up to $3,000 in relocation assistance from Freddie when the short sale is complete.
It's part of what the industry now refers to as the "graceful exit."
And with the changes coming from Freddie, the exit is about to get much faster.