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Fannie Mae Shortens Wait Time After Deed In Lieu

By Christine Hynes

Mortgage and Lending with American Capital Corporation

April 17, 2010 05:56 AM

Today Fannie Mae announced the decision to shorten the time a borrower has to wait before they can qualify for a mortgage after a short sale or foreclosure. These new guidelines come a week after the government’s Home Affordable Foreclosure Alternatives (HAFA) program hit the market, and Fannie Mae hopes the new guidelines and HAFA program will work together in an effort to get borrowers back in homes as soon as possible.

Normally, borrowers are required to wait four years after a foreclosure before they can apply for a mortgage again, and at least two years after a deed in lieu of foreclosure. With the new guidelines, borrowers can be approved for a new mortgage two years after a deed in lieu of foreclosure provided they have a 20% down payment.

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Tiffany Torgan

Harcourts Prestige Properties of La Jolla - La Jolla, CA

Featured on HGTV's New Show! How Close Can I Beach

Hi Christine, that is so kind of them. I feel sorry for the people who have to give up their homes at all.

Apr 17, 2010 05:58 AM

Anonymous

I have mixed emotions on this subject. I don't see it as Fannie Mae being kind, they just want to make money again. Which I do not blame them, they are a business after all. Realistically, how many borrowers who have actually gone through foreclosure or deed-in-lieu will have saved up 20% in two years. If I had to guess, not many.

Apr 17, 2010 06:13 AM

Deborah Byron Leffler BzyBee Real Estate Lady!

Keller Williams Realty Boise - Nampa, ID

It is an interesting concept...and I would bet we will be seeing more on the subject in the way of revisions as well!!!

Apr 17, 2010 06:22 AM

Malcolm Johnston

Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON

Trenton Real Estate

I imagine that this might help people who have won the lottery or come across some windfall in the immediate two years after foreclosure. 20% of a downpayment is hard to come by in 2 scant years.

Apr 17, 2010 06:40 AM

Christine Hynes

American Capital Corporation - Laguna Beach, CA

Orange County Senior Loan Consultant

Tiffany - Times are hard and I think in some cases it has been a relief for homeowners to give up large mortgage payments for smaller rental payments. Losing a home and disrupting the family i know takes a large toll on the whole family. I think we are all adjusting the best we can.

Deborah and Malcolm - I do think saving 20% is a stretch for many homeowners after a foreclosure. There are programs that allow gift funds from family members for a percentage of this down payment. I am also seeing retired parents buy homes with their kids because of hard times and the parents have the down payment. I also think depending on the housing market, we may see more programs changing to figure out ways to move homes and maybe change down payments again. Who really knows.

Apr 18, 2010 02:04 AM

Michael J. O'Connor

Diamond Ridge Realty - Corona, CA

Eastvale - 951-847-4883

I'm glad to see the change. If someone has done either a short-sale or a deed-in-lieu it was at least being 'proactive' on their part. Sure they will take a credit hit but for many people the problem they encountered was not of their own making. And yes, the idea is for the lenders to make more money but two years seems fair to wait.

Apr 18, 2010 06:37 AM

Michael - It is interesting that the banks created all these loan products and underwriting guidelines, and were all in bed with many of the same products, the yellow car, the blue, black car. The big and small car and still have not really stood up and taken responsibility for these broken cars.

Apr 18, 2010 06:57 AM

Fannie Mae Shortens Wait Time After Deed In Lieu

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