The short sale market is picking up speed. A nationwide survey of real estate agents conducted by Campbell Communication, Inc. just last month found that 20% of completed home sales in the fourth quarter across the country were short sales or pre-foreclosure sales.

 For home owners in distress over declining property value and upwardly adjusting payments who may also be facing the trials of job loss, health crisis, or divorce, there is some good news out there.In February, Freddie Mac expanded its short sale program to include more loans with a higher likelihood of loss. This is in addition to a move in late last year where Freddie authorized its Tier One servicers — those that have demonstrated “superior performance” — to accept short sales at bigger discounts and to pay out more to junior lien holders.

Also encouraging, Fannie Mae plans to roll out a new program in the next few months to facilitate more successful short sale transactions. A vice president for credit loss management in Fannie’s Dallas office said the government-sponsored enterprise is looking at ways to encourage servicers to implement a streamlining of the process. “We want to incentivize the borrower with a program of preapproved short sales.”This is great news for future buyers and sellers contemplating the short sale - as the typical time frame for this process has been taking anywhere from three to nine months according to industry experts. Couple this rugged time frame with reports that 1/3 of these contracts never make it to closing, and there is a process ripe for change.

Hopefully Freddie Mac and Fannie Mae are sending a message that shows mortgage investors may be willing to make further concessions as housing prices fall and the inventory of foreclosed properties continues to grow. There is surely a need for any aggressive approach to address the challenges of this current housing market.The time may be now to seriously consider a short sale on the buy or sell side.