A recent report revising the waiting periods for distressed borrowers with a derogatory credit event such as a foreclosure, bankruptcy, short sale, or deed-in-lieu of foreclosure on their credit history to obtain a new loan has been released by Fannie Mae. This revised statement reduces the waiting period up to two years for borrowers with a short sale or deed-in-lieu of foreclosure on their record if there are extenuating circumstances that borrowers can prove. FannieMae

According to Fannie Mae, extenuating circumstances are defined as “nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.”

If a borrower has a foreclosure on his or her credit record, the new minimum waiting period is seven years. Under extenuating circumstances, that period is shortened to three years with some additional requirements for up to seven years. For those with a bankruptcy the waiting period is four years but two years with extenuating circumstances from the discharge date.

Fannie Mae said in the report that it is “focused on helping lenders to provide access to mortgages for creditworthy borrowers while supporting sustainable homeownership” and that the new policy “provides opportunities for borrowers to obtain a loan to Fannie Mae’s maximum LTV (loan-to-value) sooner after the Pre-foreclosure, Short Sale or DIL.”

0 Comments

  • Michael Evans

    September 17, 2014 - 8:13 pm

    It is somewhat of a punishment to have to wait at all to buy a house again after a short sale or foreclosure. Home prices are on the rise and getting back into a home now will elevate your Equity and your attitude in a positive way. When they speak of extenuating circumstances that comes down to literally the underwriters discretion of those circumstances.
    we have developed a program that will allow people to get back into their home immediately with no waiting period at all it does require 20 down payment and is allowed in specific states in the United States.
    Feel free to contact me to see what your optios are for now or in the future.
    Michael Evans

    • SandyFloresRE

      September 18, 2014 - 6:11 pm

      Sounds Great!
      could you send me the info 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *