A few weeks ago I posted a blog re: Short Sale and Foreclosure. There has been some discussion regarding the true guidelines of a short sale as it relates to credit - first lien mortgage credit specifically.
It wasn't until a few months ago that short sales were even recognized as anything other than a foreclosure by FNMA. On June 25, 2008 FNMA issued a bulletin - Number 08-16 - calling them "Preforeclosure Sales". In that bulletin, it was stated that a new residential mortgage could be considered as soon as two years after completion vs four years.
BUT...here's the catch...
FNMA sets the "guidelines".
Investors make the "rules" that we must live by... or they don't buy the loans. These are the very same investors that are currently taking all those losses resulting from short sales, by the way!
Look at it this way. FNMA draws a line in the sand and says "Don't cross it". THEN it's up to the investors to determine how close they want to get to that line without going over it.
Now that FNMA has drawn the line at two years, over time investors might start edging closer to that line. But that is most likely not going to happen until after they have stopped licking their wounds from all the losses they have been forced to take.
BTW- government underwriting guidelines (FHA and VA) clearly state that Short Sales are to be viewed the same as foreclosures.