A short sale is one where the seller tries to sell their home for a price that is lower than the amount of liens held against the property. In order for a short sale to go through, the lender (and if there is more than one lien on the home, all lenders) must approve any offer. This can take months. For a more detailed understanding of this process, read Short Sales Can Take a Long Time. The problem has become so acute that many Realtors and buyers refuse to even consider placing an offer on a short sale. The result is that most of these short sales end up as foreclosures.
In an effort to reduce the number of foreclosures, Fannie Mae has launched pilot projects in Phoenix and Orlando to pre-approve short sales. In this program, the lender agrees on a price and the loss it will take prior to a deal even being made. This program focuses on homes that have a Fannie Mae-backed loan serviced by Countrywide Financial Corp.
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