Loss Mitigation: Nonretention Options
Short Sale
A short sale may be an appropriate workout option when all home retention options have been exhausted, and the borrowers are unable to continue paying their full mortgage payment (including escrows).
You have authority to complete a borrower-titled short sale on every MGIC-insured loan that meets our Delegated Guidelines. MGIC requires that you perform a borrower financial analysis for all short sales.
Short sales that fall outside of Delegated Guidelines require MGIC approval before the sale is completed. Submit your request for approval to MGIC.
MGIC has provided full short sale and deed in lieu (DIL) delegation to Fannie Mae effective November 28, 2011. In their recent Servicing Guide Announcement, Fannie Mae instructed servicers to contact the mortgage insurers regarding reporting requirements for this delegation. At this time, MGIC has no reporting requirements for servicers on this delegation. However, as servicers implement the new MI Industry Workout Reporting Template, we do expect all short sales and DILs to be reported in that format.
If you have any questions on this delegation, please contact your Fannie Mae Portfolio Manager.
Home Affordable Foreclosure Alternatives (HAFA) Guidelines
MGIC delegates authority under HAFA if the short sale complies with MGIC Delegated Guidelines for short sales. To better understand MGIC’s guidelines with regard to HAFA, please review this overview document.
Guidelines
See section 2.06 of MGIC’s Default Servicing Guide.
Submission
Submit the following via MGIC/Link Servicing.
- the results of the MGIC Financial Analysis or comparable analysis (for all short sales); AND
- request for approval and required documentation for short sales that fall outside of Delegated Guidelines. Select Short Sales in the main menu.
Support
Contact MGIC Customer Service, customer_service@mgic.com or 1.800.424.6442.
View our MGIC/Link Short Sale training tutorial.