Servicing Guide

Published November 10, 2020

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What conditions must be met for completion of a Fannie Mae short sale transaction?

The following table provides the conditions that must be met for all short sale transactions.

Conditions for completion of a Fannie Mae short sale transaction
 

All parties involved in the short sale transaction must sign and date a Short Sale Affidavit (Form 191) at the closing.

Note: If the closing law firm or settlement agent is prohibited by law from signing Form 191, the servicer must condition the waiver of the signature upon an agreement that the closing law firm or settlement agent will not act as the closing agent on a subsequent transaction involving the subject property within one year of the closing of this short sale transaction.

 

The borrower or the purchaser must not receive any funds or commissions from the sale of subject property, with the exception of the borrower receiving a relocation incentive payment from Fannie Mae or another acceptable source (see Incentive Payments to Assist the Borrower with Relocation Expenses for additional information).

 

Any relocation incentive payment received by the borrower from Fannie Mae must be reflected on the settlement statement.

 

The deed conveying the property to the purchaser must be amended, in compliance with applicable state law, to include the following provision:

“Grantee herein is prohibited from conveying captioned property for any sales price for a period of 30 days from [Insert date of short sale closing]. After this 30–day period, Grantee is further prohibited from conveying the property for a sales price greater than $ [Insert value equal to 120% of short sale price] until 90 days from [Insert date of short sale closing]. These restrictions shall run with the land are not personal to the Grantee.”

Note: If a short sale falls into either of the following categories and the purchaser requests a waiver of the deed restriction requirement, the servicer must submit its recommendation to Fannie Mae for prior written approval:

  • HAP provided by the Department of Defense, or

  • a purchase that is the result of an employer relocation program.

For more information please see: D2-3.3-01, Fannie Mae Short Sale.

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If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

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