Make us your home page
Instagram

Fix for Fannie Mae's short-sale credit flaw on way, Sen. Nelson says

A federal mortgage-backing giant will soon fix a credit flaw that led former homeowners' short sales to be mistakenly reported as foreclosures, Sen. Bill Nelson said Thursday morning.

Fannie Mae plans to make changes to its reporting system "any day now" that will prevent the damaging error, the Florida Democrat said in a statement. Affected homeowners saw their credit scores damaged by a "kiss of death" and faced longer delays before they could sign for a new loan.

Banks and credit bureaus blamed the error on credit-reporting software that lacked a distinct code for short sales, in which homeowners work with banks to sell their homes for less than they're worth.

Sales of "underwater" homes were a rarity before the housing crisis but accounted for nearly a quarter of all Tampa Bay home sales last year.

In May, one month after the Tampa Bay Times reported on the flaw, Nelson pushed for a fix to the "disturbing" problem from federal regulators.

Changes by Fannie Mae, which backs nine out of 10 new mortgages, could allow short sellers to buy homes three to five years earlier than if their credit was marked with a foreclosure.

Nelson's office said Thursday an announcement from Fannie Mae was imminent, but did not specify when.

"Regardless of the cause, I'm glad Fannie Mae is fixing the problem," Nelson said in a statement. "You can't punish homeowners who went upside-down solely because of the economic downturn and loss of value in their home." Pam Marron, a Trinity mortgage broker who works with short sellers, said the fix would be crucial to clearing up confusion from sellers accused by lenders of lying or hiding their foreclosure.

"This is incredibly great news. I'm speechless," Marron said. "People were putting all this money down and getting great credit scores and removing their hardship, and we were still locking them out."

Drew Harwell can be reached at dharwell@tampabay.com or (727) 893-8252.

Fix for Fannie Mae's short-sale credit flaw on way, Sen. Nelson says 08/22/13 [Last modified: Thursday, August 22, 2013 8:22pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Strategic Property Partners launches website for Water Street Tampa

    Business

    Strategic Property Partners has launched its official website for Water Street Tampa, its 53-acre redevelopment project in downtown Tampa Tuesday.

    Strategic Property Partners on Tuesday announced the name of its new development: Water Street Tampa. [Photos courtesy of SPP]
  2. ReliaQuest CEO Brian Murphy named sole Tampa Bay winner in EY state entrepreneur contest

    Business

    ReliaQuest founder and CEO Brian Murphy was named one of nine winners statewide and the only one from the Tampa Bay area in the Ernst and Young Entrepreneur Of The Year 2017 Florida Awards program. Murphy won in the IT security division after starting ReliaQuest in 2007. Five of the nine winners were from the Miami …

    Tampa's ReliaQuest founder and CEO Brian Murphy was named one of nine winners statewide and the only one from the Tampa Bay area in the Ernst and Young Entrepreneur Of The Year 2017 Florida Awards program. Murphy won in the IT security division after starting ReliaQuest in 2007.
  3. U.S. Rep. Charlie Crist and estranged wife Carole put Beach Drive condo on the market

    Real Estate

    ST. PETERSBURG — U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their Beach Drive condo on the market for $1.5 million.

    Former Florida Gov. and current U.S. Rep. Charlie Crist and his estranged wife, Carole, have put their condo in downtown St. Petersburg on the market for $1.5 million. [Courtesy of Rhonda Sanderford]
  4. First WannaCry, now cyberattack Petya spreads from Russia to Britain

    Business

    Computer systems from Russia to Britain were victims of an international cyberattack Tuesday in a hack that bore similarities to a recent one that crippled tens of thousands of machines worldwide.

    A computer screen cyberattack warning notice reportedly holding computer files to ransom, as part of a massive international cyberattack, at an office in Kiev, Ukraine, on Tuesday.  A new and highly virulent outbreak of malicious data-scrambling software appears to be causing mass disruption across Europe.
[Oleg Reshetnyak via AP]