Advising Short Sale and Deed-in-Lieu Clients 2010. If you are working with a client who has had a short sale or a deed-in-lieu in their past…or you are listing a home and your sellers may have the same issues…Fannie announced new waiting periods, as of July 1, 2010, before being eligible for another loan. The waiting period is defined as “from the date of the pre-foreclosure to the date of application”.
•· Fannie defines ALL Pre - foreclosure events as any one of the following:
•o Deed-in-Lieu
•o Preforeclosure Sale
•o Short Sale
•· Full Foreclosure retains a 5 yr waiting period
New Waiting Period Requirements
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Preforeclosure Event
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Current Waiting Period Requirements
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New Waiting Period Requirements
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Deed-in-Lieu of Foreclosure
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4 years
Additional requirements apply after 4 years up to 7 years
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•· 2 years - 80% maximum LTV ratios
•· 4 years - 90% maximum LTV ratios
•· 7 years - Standard LTV ratios
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Preforeclosure Sale
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2 years
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Short Sale
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No specific policy currently exists
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For extenuating circumstances, for all 3 event scenarios, it's a 2-year waiting time and 90% LTV.
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