SCRA Protection – Fannie Mae and Freddie Mac and short sale

Compliance > Lending > Service Members > SCRA
Q: Under the new Fannie Mae/Freddie Mac programs, service members with Fannie Mae or Freddie Mac loans who receive PCS orders will be eligible to sell their homes in a short sale, even if they are current on their mortgage. What does the program provision stating that a house must be a primary residence mean for current borrowers? Obviously, once service members move, a house is no longer their “primary residence” because they don’t live there anymore. Does it mean a renter is not in the home at the time of the application for a short sale?
 
A:  The primary residence criterion for current borrowers requires that the borrower, including service members with PCS orders, must be living in the home at the time of the short-sale evaluation. If the service member has already moved out of the house, the loan servicer should submit the case to Fannie Mae or Freddie Mac for review of any special circumstances.
 
 
ADDITIONAL INFORMATION – This Q&A was released by the Federal Reserve Board, in follow up to their Servicemember Financial Protection Webinar that was presented on September 10, 2012 - https://www.consumercomplianceoutlook.org/2013/first-quarter/servicemember-financial-protection-webinar/
 

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