I had a recent conversation with a negotiator that was servicing a file with Fannie Mae and told me the ways you can get an automatic short sale approval from Fannie Mae.  I should correct myself and say “approved of” but only the value and the offer are needed if you have one of these 4 circumstances.  In each instance, the borrower can remain current if they choose and still qualify.  

  1. Death of the Borrower – In this case if anyone dies that is on the mortgage then they will do the short sale.  This one is pretty obvious financially, but likely the hardest one to get a seller motivated for. 
  2. LongTerm or Permanent Disability – This one is less obvious.  The reason for this one is there is a presumption that your income is effected.  This could be the opposite of true.  As long as you have proof of a disability that is long term in nature, that is the only requirement.  In fact, you could have had a large settlement and your disability might be something painful but not something that would take you out of the workforce.  In this case, you still qualify!
  3. Another sad one is Divorce.  Here the only thing needed is a divorce decree.  For “automatic” status you both must be on the loan.   However, income changes, etc aren’t factored into the approval only that there’s a divorce for the parties on the loan.
  4. Long Distance Job | Relocation – This is the one that’s a doozy!  Let’s say you get a promotion and your income doubles or triples.  If you have to move out of state, even if it’s 45 minutes from the border, etc, you automatically qualify for the short sale.  Just need a pay stub.

All of these ways give you a short sale approval from Fannie Mae (pending price approval and offer), and allow you to be current too (meaning you don’t HAVE to miss payments)!