On July 29th, Fannie Mae posted a Seller Guideline Announcement updating their current credit policies as well as an update to DU. Those changes have been implemented over the past weekend. Many of the changes benefit borrowers who may have had foreclosures as part of bankruptcies in the past. However for borrowers with prior short sales, you are no longer eligible for financing after just 2 years with 20% down payment.
SUMMARY:
Effective Date(s):
All changes apply to applications dated on or after 08/16/2014 and to case files submitted or re-submitted to DU on or after 08/16/2014.
Mortgage Debt in a Bankruptcy
• The borrower is held to the BK waiting period and not the Foreclosure waiting period.
Foreclosures and DU
• Underwriters can instruct DU to ignore incorrect foreclosure information.
Deed-In-Lieu of Foreclosure and Pre-Forclosures (Short Sale)
• The waiting period for borrowers who have had a deed-in-lieu of foreclosure or short sale is now four (4) years.
New Mortgage Charge-off Policy - Effective immediately
• Fannie Mae will now require a four (4) year waiting period for any charged off mortgage account.
Please note: FHA allows financing 3 years after a short sale/foreclosure.
