Short Sale Fix Announced

Evergreen, Colo., August 27, 2013 –  Fannie Mae and Senator Bill Nelson (D) of Florida recently announced a fix to an issue with how short sales are conveyed on credit reports. Fannie Mae, according to its August 22, 2013 Desktop Originator/Desktop Underwriter Release Notes, has provided a mechanism allowing lenders to override incorrect foreclosure tradeline data that might appear on a consumer’s credit bureau report. This fix will be a welcome solution to the challenge of automated underwriting systems reading short sales as foreclosures which is more harmful to one’s credit history.

An error in the standardized computer software the industry used was the main issue in how to report a short sale. Prior to the economic downturn in 2008 this was a relatively uncommon problem. Fannie Mae is voluntarily changing their system to solve this reporting problem, which will be a relief for many homeowners who were turned upside down in the economic crisis.

The National Consumer Reporting Association (NCRA) along with Senator Nelson of Florida and Senator Claire McCaskill (D) of Missouri all worked diligently to get this issue resolved and are happy to be able to report this solution, “Regardless of the cause, I’m glad Fannie Mae is fixing the problem,” Nelson said. “You can’t punish homeowners who went upside down solely because of the economic downturn and loss of value in their home.”

Fannie Mae expects to have this solution implemented during the weekend of November 16, 2013 when they implement Desktop Underwriter® (DU®) Version 9.1.
Use this URL to see the Fannie Mae solution document in its entirety: