Loan Guidelines for Clients with Previous Short Sales:
Freddie Mac requires, “Evidence on the credit report and other credit documentation that the Borrower has reestablished an acceptable credit reputation for at least the most recent 24 months after the discharge or dismissal of a bankruptcy, short payoff related to a delinquent mortgage obligation, deed-in lieu of foreclosure or other significant adverse or derogatory credit information.” Fannie Mae Requires, “a two-year period is required to re-establish credit, measured from the completion date.” These guidelines can be found in Fannie Mae and Freddie Mac’s Seller’s Guides (https://www.efanniemae.com/sf/guides/ssg/index.jsp and http://www.freddiemac.com/singlefamily/# - just click where it says AllRegs. HUD however is far more interesting. They will make your client wait 3 years after the short sale unless, “they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and the proceeds from the short sale serve as payment in full.” HUD Mortgagee Letter Concerning Short Sales Hopefully this is good news knowing that there's at least 1 good financing option for homeowners doing a short sale who have no late payments. The even better news is that Fannie and Freddie are going to loosen up on allowing people in that situation to do short sales (more to come on that later).
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