"Big Changes are on the way from Fannie Mae (This applies to conventional loans). The current wait period after a short sale to obtain a mortgage is 2 years if a buyer is putting 20% down. OnAugust 16, the waiting period will become 4 years. This means if you are currently looking to buy and in this scenario, you must have a loan application submitted to your lender before August 16 or you will have to wait 4 years to be eligible for a conventional loan.
The news isn’t officially out from Fannie yet, but the industry expects an official announcement in early July.
On June 17, 2014: Fannie Mae issued Desktop Underwriter Release Notes for a DU release on August 16, 2014. Among other things, the DU update will require a four-year waiting period for borrower’s who have a previous deed-in-lieu of foreclosure or a pre-foreclosure sale (short sale). The waiting period will be two years for borrowers if the deed-in-lieu or pre-foreclosure sale was due to extenuating circumstances. Fannie Mae has not published a Selling Guide announcement on this topic. We expect the announcement in July and the announcement will have further details and guidance." - Bill Argos
If you have clients in this scenario be sure to get them in touch with your preferred lender before August, 16th. Otherwise they may have to wait an additional two years.
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