Q: What are the appraisal criteria for approving or declining a short sale request?
A: Loan servicers receive property valuations from the government-sponsored enterprise (GSE, that is, Fannie Mae or Freddie Mac). The borrower is not charged for this property valuation. The GSEs use the property valuation to provide the servicer with the estimated market value of the property. Servicers provide listing price guidance to the borrower based on this estimated market value. The value is provided only for guidance and should not be presented by the servicer as a required listing price. The criteria for approving or declining a short sale can take into account both the estimated market value and the projected costs of the transaction.