Long Beach, CA (PRWEB) August 12, 2014
Fannie Mae recently announced a couple of really big changes to the Waiting Periods required to purchase a home after a financial hardship that resulted in either Foreclosure, Short Sale or Deed in Lieu of Foreclosure, reports Scott Schang, Branch Manager Broadview Mortgage Long Beach.
On July 29th, 2014 Fannie Mae made an unprecedented move to loosen up qualifying guidelines for borrowers that included mortgage debt in a bankruptcy by removing the waiting period for any foreclosure, short sale or deed in lieu of foreclosure that occurred after the mortgage debt was discharged through a bankruptcy, adds Schang.
Effective August 16th 2014, the ability to use the Bankruptcy date instead of a subsequent foreclosure date, does not appear to include pre-foreclosure events such as Short Sale or Deed in Lieu of foreclosure.
This change in policy seemed to be opposite of the simultaneous news that Short Sale or Deed in Lieu waiting periods are being extended.
For the past few years, Fannie Mae has treated pre-foreclosure events, Short Sale or Deed in Lieu of Foreclosure, differently than a foreclosure, says Schang.
With a 20% down payment, and a minimum 680 credit score, home buyers were able to buy in only 24 months from the completion date of the short sale or deed in lieu. For any loan applications taken after August 16th, 2014 this option goes away, reports Schang.
This is really the only change that could be construed as having a negative effect on new homebuyers trying to get back into the market after a pre-foreclosure event, adds Schang.
If home buyers had less than a 20% down payment, they could purchase using conventional financing with only 10% down, 4 years after a short sale or foreclosure with a minimum 680 credit score.
If a home buyer had a short sale or deed in lieu, the waiting period before being eligible to buy with conventional financing has been moved to 4 years.
However, the 4 year waiting period does not appear to come with the same loan to value and credit score restrictions as did the previous guideline. Homebuyer’s with a short sale or deed in lieu can buy in as little as 4 years with a minimum 620 credit score, and 5% down payment, reports Schang.
For more information visit: http://www.findmywayhome.com/home-mortgage-news/buying-after-short-sale-waiting-period-extended/.