Recently Fannie Mae has come out with guidance that makes the waiting period for people who agree to a deed-in-lieu of foreclosure from four years to two years before they can get a mortgage from Fannie Mae.
Fannie Mae is trying to encourage people to agree to deeds in lieu of foreclosure — not to give those they actually have to foreclose on a break.
The announcement also clarifies that Fannie Mae considers the terms “short sale” and a “preforeclosure sale” to be synonymous. The existing policy has been that you could be eligible for a loan again within two years after a preforeclosure sale. There was no official policy for a “short sale.” Now, they are saying the two years applies to short sales, too. NO CHANGE.
If you cannot pull off a short sale or agree to a deed-in-lieu, Fannie Mae will still require FIVE YEARS for borrowers who lose their homes through foreclosure to re-establish credit.
Borrowers may qualify in as soon as three years if they can document extenuating circumstances, such as the loss of a job, illness or divorce.
The minimum wait for borrowers who have filed for bankruptcy remains two to four years, depending on the type of bankruptcy filing and the borrower’s success in repaying their creditors.
You can learn more about this announcement by seeing the Fannie Mae announcement here.
Related posts:
- Losing Your Home to Foreclosure? Shoot Yourself and All Will be Forgiven by Fannie Mae?
- Meet Your New Landlord: Uncle Sam (aka Fannie Mae)
- Investors, Say Hello to Fannie & Freddie
- Confronting Foreclosure instead of Hiding from it
- Foreclosure And Its Effect On Non-Foreclosure Homes
Article Author: Justin McHoodJustin has written 21 articles for us.
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Joshua Dorkin
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I agree this is just the beginning. There is a large percentage of the US population who have been foreclosed upon, who are otherwise capable of improving their credit and owning a home again.
I work for a company that represents REIC Global, which just had an article on BiggerPockets, this week, discussing when a lease option makes sense for those who are looking to buy a home again. Like the Fannie Mae program, a person can own a home in two years, but this way you can move into the home now, rent it for two years, and then buy it at the end. If you’ll be renting a house anyway, may as well be one you can stay in. You can read the full BiggerPockets article.
Banks cheated a lot of honest homeowners a few years ago, which led to this crisis, so I’m glad the banks are showing some degree of compromise.