Fannie Mae has increased time in the penalty box for people with foreclosures on their credit report. Currently a 4yr time frame must pass and that has been increased to 5yrs.

No doubt this is in answer to the many borrowers who can pay their mortgage and elect to let their homes go back to the bank because they owe far more than the home is worth. The banks call it Jingle Mail when a borrower just flat out 'does the give-up' and mails in their keys.
Banks are usually left holding the bag on a home that cannot begin to payoff the balance after auction.

The credit crunch has been here for months and seems to only be getting tighter. If you have past credit issues and are looking for a mortgage, those options are tightening up really quick.

Realtors: Take note that your clients are also subject to rate adjustments for low FICO scores. So when your borrower says that their best offer is 6.5%, do not assume that the Loan Officer is just being greedy. Risk adjustments may be the likely cause.

While Fannie Mae is quickly adjusting their product offerrings for the current market, FHA Loans are still cranking out deals under the old rules. Although FHA hasn't made any drastic changes, expect a slight rate adjustment and minimum FICO scores going forward(lender requirements, not FHA requirements).

FHA: This isn't your father's mortgage. FHA is looking very sexy these days!!!

Tom Burris
DallasLoanGuy.com
Dallas, TX

"A Home Loan for Every Texan"

http://www.dallasloanguy.com/

Texas Home Loans

I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to My Blog and stay informed about current lending changes!!

While I personally focus on Texas Home Loans and First Time Home Buyers.... I do lend in other areas. We are in about 46 States and adding programs to bring full service to an area near you.

Posted by Tom Burris | FHA VA & Conv. Texas Mortgage Loans on 04/14/2008 04:10 PM

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5 Comments on Foreclosure: New Fannie Mae Guidelines

Wow! That honestly does not surprise me. The point is protect your credit as much as you can. Don't let a foreclosure choke your credit to death! Have a great day!

04/14/2008 04:13 PM

by Jennifer Butz (Not Sure Yet)

Tom - I'm not sure what took me so long, but now I'm subscriber. Love your last line:-) Nice run-down here of what is going on.

04/14/2008 04:14 PM

by Jason Sardi, Pennsylvania Mortgage Broker (First Choice Equity Group Inc.)

Tom, Your industry seems to be changing on a daily basis. I thought they were way too loose before but wow has the pendulum swung the other direction.

04/14/2008 05:36 PM

by Marchel Peterson Spring TX Real Estate E-Pro ABR (Results Realty)

Tom.... where have you been.... your last two posts were informative... and I just did the week in review, which covered from the 7th to the 13th... lol In any case,.... FHA was even great when it was 4 yrs for fnma.... FHA is 3 yrs from the date of sale.... in any case, write more... ;o) And we need some more help with the week in review. Would you like to do it again?