Fannie Moves to Facilitate Short Sales

American Banker (04/09/08) P. 1; Berry, Kate
A new program from Fannie Mae that will preapprove short sales and make the process more efficient indicates that investors are relinquishing their hold on short sales amid rising foreclosures. The short-sale process tends to slow as servicers wait for first and second mortgage holders and investors to approve the transaction. Stricter underwriting standards also are playing a role, with Clayton Holdings Inc.'s Kevin Kanouff noting that servicers must "calculate what you think you would lose on the sale price and what you would lose on a foreclosure, and weigh that against what a borrower can get refinanced at." As part of its new program, Fannie Mae urges servicers not to reduce real estate commissions. A March poll of real estate agents by Campbell Communications Inc. indicates that short sales and preforeclosure sales accounted for 20 percent of transactions in the fourth quarter.