FHFA Improves Note Sale Program
BY CHARLES DAWSON, VIJAY YADLAPATI
On March 2, 2015, The Federal Housing Finance Agency enhanced requirements for sales of non-performing loans by Freddie Mac and Fannie Mae (the GSEs). In a letter last year to Director Mel Watt NAR raised concerns that this disposition strategy gives investors an advantage over potential owner occupant buyers. NAR requested more information on the sale of the notes and asked FHFA to study the cost and impact of bulk note sales to institutional investors. In January, NAR met with FHFA officials who indicated that coming changes would improve the note sale process.
As part of the changes, borrowers whose loans are sold as part of the program must be considered for other relief such as a short sale. Additionally, if the home should go through the foreclosure process, for the first 20 days after a an REO property is marketed, the property may be sold only to buyers who intend to occupy the property as their primary residence or to non-profits
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