New short sale guidelines went into effect Nov. 1 for Freddie Mac and Fannie Mai backed loans. The hope is that it will streamline the short sale process and get rid of some of the current backlog. One of the most time consuming aspects of a short sale has been getting the approval of Fannie Mae or Freddie Mac. The big question is whether or not junior lien holders will go along with the plan. Under the new guidelines there is a maximum payout to second liens of $6000 which seems like a lot but may not be on larger loans.
This is not the 100% solution to the short sale problem but it should be a step in the right direction. The burden will fall largely on the loan servicers that still have to handle the short sale process to make sure that the short sales are handled correctly and are properly executed.