Effective November 1st, Fannie Mae and Freddie Mac will assist homeowners who have not been delinquent with mortgage payments, but who are “underwater”, with a mortgage greater than the market value of the home. Fannie Mae and Freddie Mac will place a $6000 cap on the amount of money holders of 2nd mortgages may receive when the sale is completed, with the caveat that the holder of the 2nd mortgage has the prerogative to reject the sale. The cumbersome and lengthy short sale process has been due, in part, to negotiations between the lender holding the primary mortgage and the secondary lien holder(s) of 2nd mortgages and home equity loans. The aim is to reduce foreclosures by facilitating short sales, in the broad interest of the economy, lenders, and sellers.
