With short sales becoming a popular alternative to foreclosure, Freddie Mac recently took action to make the completion of these sales easier.
Starting November 1, short sales will be easier to process, as the nine mortgage insurance companies in the United States signed delegation agreements that allow Freddie Mac servicers to approve short sales and deeds. This agreement should allow more distressed borrowers to avoid foreclosure.
"We applaud the nation's mortgage insurers for committing to work with us and our servicers to help more borrowers to obtain short sales and other foreclosure alternatives," said Tracy Mooney, senior vice president of servicing and REO at Freddie Mac.
Mooney added that the agreement should help support the housing recovery and lessen the blow on taxpayers.
In addition, this could potentially help the already declining foreclosure inventory. According to CoreLogic, there were approximately 1.4 million, or 3.3 percent of all homes with a mortgage, in the national foreclosure inventory as of September. This number was down from 1.5 million in August and could decline even further if more borrowers are able to successfully complete short sales.
