If your home is backed by Fannie Mae or Freddie Mac and most are. You may find it easier to short sale your home. Here is a news release that you may find helpful.
FEDERAL HOUSING FINANCE AGENCY
For Immediate Release Contact: Corinne Russell (202) 649-3032
June 21, 2012 Stefanie Johnson (202) 649-3030
FHFA Announces Short Sale Assistance for Military
Homeowners with Fannie Mae or Freddie Mac Loans
Washington, DC – Federal Housing Finance Agency (FHFA) Acting Director Edward J.
DeMarco today announced changes to short sale policies that will make it easier for military
homeowners with Fannie Mae and Freddie Mac loans to honor their financial commitments
when they are required to move as part of their duty.
At a news conference with Consumer Financial Protection Bureau (CFPB) Director Richard
Cordray, CFPB Assistant Director of Servicemember Affairs Holly Petraeus, and Deputy
Assistant Secretary of Defense for Military Community and Family Policy Robert L. Gordon III,
DeMarco announced that military homeowners who receive Permanent Change of Station
(PCS) orders will be eligible to sell their homes in a short sale even if they are current on their
mortgage. PCS orders often require quick moves and can create hardship for military
homeowners who are underwater on their mortgages and therefore cannot sell their home
without taking a loss. Previously, many service members felt their only option was either to
maintain financial obligations on two residences or to default on their mortgage.
“It is in everyone’s interest for the men and women serving in our armed forces to focus on the
important job they are doing defending our country, rather than worry about the maintenance
and leasing of a property in another jurisdiction,” said DeMarco. “These Fannie Mae and
Freddie Mac policy changes, in combination with related guidance last fall, should now provide
military homeowners with access to the immediate and automatic full range of foreclosure
DeMarco commended the CFPB and the prudential regulators – the Board of Governors of the
Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union
Administration, and the Office of the Comptroller of the Currency – for issuing a new
interagency guidance that reinforces for mortgage servicers the importance of treating military
homeowners with PCS fairly.
Under the new policy Fannie Mae and Freddie Mac will not pursue a deficiency judgment or
any cash contribution or promissory note from members of the military with a change in duty
station for any property purchased on or before June 30, 2012. Service members must have a
Fannie Mae or Freddie Mac loan to be eligible.
Last year Fannie Mae and Freddie Mac issued guidance to mortgage servicers confirming PCS
orders as a qualifying hardship for forbearance and loan modifications.
Service members can check Fannie Mae or Freddie Mac websites to see if their loans are held by them or they can call hotlines for military homeowners at 1-877-MIL-4566 or 1-800-FREDDIE.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.
The Federal Housing Finance Agency is announcing changes to short sale policies that will make it easier for military
homeowners with Fannie Mae and Freddie Mac mortgages to honor their financial commitments when they are issued a
Permanent Change of Station (PCS) order.
Currently, military homeowners with PCS orders are required to move to a new duty station under short, strict timelines.
However, service members still remain bound to their financial obligations, including their mortgages. If their homes have
declined in value, they may be unable to sell the home and obtain sufficient funds to pay off the mortgage debt obligating
them to continue making monthly payments after relocating to a new duty station.
Changes to Fannie Mae and Freddie Mac short sale policies for military homeowners will alleviate some of the issues faced
when a member of the armed forces receives a PCS order including the burden of having to sell their home in a difficult
housing market. These changes dovetail with guidance issued by Fannie Mae and Freddie Mac to servicers last year
establishing PCS orders as a qualifying hardship for forbearance and loan modifications.
FHFA will issue guidance by September 30, 2012, and it will be effective 60 days later.
Is Your Mortgage Owned or Guaranteed by Fannie Mae or Freddie Mac?
Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:
• www.FannieMae.com/loanlookup or calling 800-7Fannie (8 a.m. to 8 p.m. EST)
• www.FreddieMac.com/corporate/ or 800-Freddie (8 a.m. to 8 p.m. EST)
• www.KnowYourOptions.com/Military or call 877-MIL-4566 (Fannie Mae)
• www.FreddieMac.com/avoidforeclosure or call 800-Freddie (8 a.m. to 8 p.m. EST)
What Is a Short Sale?
A short sale, also known as a preforeclosure sale, is when you sell your home for less than the balance remaining on your
mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your
mortgage balance with the proceeds.
Federal Housing Finance Agency
FHFA Short Sale Assistance for Military Homeowners with
Fannie Mae and Freddie Mac Loans
Service members with PCS orders will be:
• eligible for a short sale immediately, even when they
are current on their existing mortgage (the PCS order
is treated as a hardship to deem them eligible);
• exempt from deficiency judgments from Fannie Mae
and Freddie Mac when receiving permission for a
short sale; and
• relieved of any request or requirement for a cash contribution
or promissory note so long as the property
was purchased on or before June 30, 2012, (to apply
personal assets to cover the shortfall after outstanding
unpaid principal balance and sales price).
• The person must be in the military and have a PCS
• The existing mortgage must be owned or guaranteed
by Fannie Mae or Freddie Mac.
• The service member can be current or delinquent on
their mortgage to apply for a short sale.
• The property must have been purchased on or before
June 30, 2012.