From dsnews.com:
Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.
The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.
Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).
“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales. “There is no question that this will help short sales and the market as a whole.”
This article is a bit old but maybe it helps explain why we aren’t seeing much inventory on the market.
http://www.calculatedriskblog.com/2012/02/fha-reo-inventory-declines-to-four-year.html
Essentially over the past couple of years more and more mortgages are ending up in the hands of government entities. FHA is about 30-35% of the total market, then Freddie/Fannie probably make up another 40-50 percent of the market with the private lenders just keeping the cream of the crop and high end jumbo loans.
The interesting thing is FHA delinquency rates keep going higher while FHA REO inventory is going lower. Logic would say how are serious delinquency rates going up while FHA REO inventory is shrinking unless the government is actively allowing people to stay in these properties without paying.