WASHINGTON, Aug 21 (Reuters) - The regulator for Fannie Mae and Freddie Mac streamlined one of their foreclosure prevention programs in order to make it easier for troubled homeowners to sell their homes for less than what they owe the banks.
Fannie Mae and Freddie Mac, the government-owned mortgage financiers, will now be required to consolidate their so-called “short sale” programs into one, the Federal Housing Finance Agency regulator said on Tuesday.
The regulator said this would make it easier for banks to quickly qualify eligible borrowers for a short sale, where a bank accepts less than the balance owed on the property.
Mortgage servicers will be allowed to process a short sale faster for homeowners facing certain hardships, such as death, divorce and disability without additional approval from Fannie Mae and Freddie Mac.
The guidance, which will provide banks and borrowers clarity on processing a short sale, will be effective by November.
The government-owned companies will offer up to $6,000 to second lien holders to expedite a short sale, the regulator said.