Review & Prepare to Close

Contract Review and Prepare for Closing

After submitting a contract that has been accepted by the homeowner, listing agents may receive a counter offer from Fannie Mae. During the negotiation, Fannie Mae may revise offer terms including sales price, closing costs, closing date, and other terms. During the negotiation process, payment(s) to subordinate lien holders and/or private mortgage insurers (if those parties have a stake in the property) will also be considered.

In addition, the mortgage servicer will determine if it is necessary to request a contribution from your client and how to structure an appropriate contribution arrangement. Once all required information has been reviewed, you will receive a final written decision on your submitted offer from the mortgage servicer.

The Negotiation Process

• Call your client and the buyer's agent to let them know a counter offer has been received from Fannie Mae.
• Respond to the counter offer via the HomePath for Short Sales Portal within five business days. Take note of any requested adjustments to closing costs and contributions.
• If any additional information or documentation is requested, please respond quickly to avoid delays. Pay special attention to the response instructions, as you may be instructed to provide some items directly to the servicer instead of the HomePath portal.
• If the negotiation process concludes successfully, an email notification indicating the final terms have been conditionally accepted will be sent to you via the HomePath Short Sale portal. The mortgage servicer will issue the official approval letter to you.

The Closing Process

• At closing, the homeowner, the buyer, and all parties involved in the transaction must sign the Short Sale Affidavit confirming that the transaction is an arm's-length transaction between parties who are unrelated and unaffiliated by family, marriage, or commercial enterprise.

Listing agents must ensure:

• All funds that change hands be disclosed, approved and shown on the HUD-1.
• That escrow is opened and the title preliminary is ordered at the appropriate time.
• All real estate contracts must be signed and submitted to escrow including the Purchase Contract, the Confirmation of Acceptance from the buyer's agent, and the last counter offer (if any).
• That they coordinate with the title company and provide all seller disclosures to the buyer's agent.
• Complete any remaining items required by the title company.
• Change MLS listing to "Sold".
• Arrange to have the sign, post, brochure box, and lockbox removed.
• Ensure seller receives copies of all documents.
• Ensure file is complete and the final HUD-1 is received.

Buyer's Agents must ensure:

• All Seller Disclosures are signed and sent back to the listing agent.
• That they coordinate with the listing agent to set up a home inspection and appraisal.
• The homebuyer's loan is on track and buyer has loan approval.

Things to Keep in Mind

• Total payments to second lien holders must not exceed $6,000.
• If the subordinate lien holder is accepting the $6,000 (or a lesser amount if the $6,000 is being divided among more than one lien holder) in exchange for a release of its lien, it must not require or accept additional funds from the borrower, real estate agent(s), buyer, or other party to the short sale transaction.
• No third-party short sale negotiation fees are allowed.
• Maximum commission allowed for each transaction is 6%.
• Fannie Mae short sale properties are required to be listed publicly on the local MLS for a minimum of 5 consecutive calendar days, including one weekend.
• All changes to approved offers (closing date extensions, settlement charge adjustments, etc.) must be facilitated through the servicer.