Fannie Mae recently announced requirements for Fannie Mae short sales listed in a multiple listing service (MLS). Starting August 1st, each new short sale listing must maintain an “active” status for a minimum of five days; and that timeframe must include at least one weekend. Freddie Mac announced similar guidance for Freddie Mac short sales.
“Along with our regulator, the Federal Housing Finance Authority (FHFA), we decided to take this step in response to Realtors’ concerns,” says Jane Severn, director of marketing at Fannie Mae. “We’ve had cases where a short sale property is listed in the MLS as ‘active’ and, in less than an hour, it goes into ‘pending’ status.”
Florida Realtors’ Vice President and General Counsel Margy Grant says the requirement will change the way some members list a home in their MLS.
“Realtors should identify any short-sale listings that would require approval by Fannie Mae or Freddie Mac,” Grant says. “If the new rules apply to a listing added to the MLS after Aug. 1, we recommend that agents put a disclaimer in MLS comments telling cooperating brokers that the seller must keep the listing active for five days, including a weekend. This disclaimer would allow cooperating agents to structure their offers accordingly.”
Grant says it’s important to remember two things: that the new rule only affects Fannie Mae and Freddie Mac short sales; and, though it directly affects sellers, it also indirectly impacts buyers’ offers.
“The rule doesn’t regulate the timing of an offer,” she says. “An offer can be submitted at any time – but a seller following these rules cannot accept any offer until the required five-day marketing period ends. A buyer’s agent could, for example, submit an offer on the first day a home is listed. However, they may want to include contract wording that gives the seller five days to accept the offer if the property must follow Fannie Mae or Freddie Mac’s rules.”
Severn says Fannie Mae wants their “short sale listings to be marketed in a manner that allows the market to see the listing.” She notes that their current policy for properties Fannie Mae owns (REO listings) reflects the same philosophy since Fannie Mae won’t evaluate offers until the listing has been in the MLS and “active” for at least three days.
Under Fannie Mae and Freddie Mac’s rules, the short sale property must be listed in an MLS that covers its geographic area, and a printed copy of the property’s MLS listing must be kept on file. If a property is located in an area not covered by an MLS, it must be advertised in a manner customary for the same period of time – at least five consecutive calendar days that includes one weekend.
Fannie Mae announced the change in a Servicing Guide announcement in June, applicable to “Multiple Listing Service Requirements for Standard Short Sale/HAFA II.” The Servicing Guide is published on Fannie Mae’s website.
© 2013 Florida Realtors®
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