This article might be of interest to those Realtors (like me) that never thought about trying to obtain "short sale" listings, and/or work with those lenders that have some of these potentials in their portfolio. There appears to be a huge "upside" for those homeowners that are about to be "upside down" in their mortgages, to work with their Realtor/lender to "short sale" this property BEFORE it actually goes to foreclosure.

                                               New Fannie Mae Guidelines Encourage Short Sales

Fannie Mae recently released updated underwriting guidelines for new mortgage loans that directly address individuals with various types of foreclosure history. Potential borrowers with a foreclosure on their credit record must wait 5 years to be considered for new funding, and are subject to additional credit and down payment requirements for 5 to 7 years.Deed-in-lieu-of-foreclosures warrant a 4 year wait with additional requirements for 4 to 7 years.

Finally, the silver lining...Short Sales require only a two year wait with no additional requirements. These new guidelines make short sales a more attractive option for homeowners as well as provide realtors with a tremendous opportunity to assist distressed homeowners with a short sale AND future home ownership.

This information can be very valuable when meeting with short sale prospects. It certainly makes sense for distressed sellers to take note of this "better mousetrap" rather than foreclosure proceedings, and also makes sense for us Realtors to not only look at this as a new source of revenue, but more importantly as a way of helping a homeowner initially get out of a distressed situation, and eventually back into a home quicker than they ever imagined!