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New FHFA Policy Benefits Military Families

Military families received some good news this week when the Federal Housing Finance Agency introduced a new guideline allowing for speedier short sales. Under the new policy, military families can qualify for a short sale without defaulting on their loan. According to the announcement, if military personnel are required to move as “part of their duty” under a Permanent Change of Station (PCS) order, they can do so without feeling as burdened.

Prior to this change, military homeowners who were under water on their mortgages were often forced to maintain two households or default on their loan in order to fulfill their assignments. Obviously, this practice placed strain and financial stress on these families.  Under the new guidelines, military families can relocate more rapidly without the need for a default on their loan or to overextend themselves financially. Now, loans offered by Freddie Mac and Fannie Mae on homes purchased prior to June 30th of this year are eligible for the reprieve.

FHFA Acting Director Edward J. DeMarci is pleased with the change, stating, “It is in everyone’s interest for the men and women serving in our armed forces to focus on the important job they are doing defending our country, rather than worry about the maintenance and leasing of a property in another jurisdiction.”  He concluded by sharing that with guidance and these policy changes, military families would benefit by being given alternatives to foreclosure.

If you are in the military and have received notice of a Permanent Change of Station, please call 877.MIL.4566 or 800.FREDDIE to find out how to benefit from this new policy. If you are not in the military, but still have a loan by Fannie Mae or Freddie Mac and want to lower your home cost quickly, you may want to consider the Home Affordable Refinance Program (HARP). Be aware that HARP funding has only been extended through December 31, 2013 and is eligible for homes where the loan-value ratio is 80 percent or higher. The loans also need to have originated by May 31, 2009.

Please contact us if you are interested in selling your current home or need more information on these loan programs. The Pruett Group is honored to serve our military clients and would be happy to share our knowledge on these and other loan programs with you and your friends.

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