Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

Fannie Mae has announced a new updated.  This time they are revising the waiting period for Deed-in-Lieu of foreclosure and Short Sale on conventional conforming loans effective with applications dated on or after July 1, 2010. Fannie Mae's Automated Underwriting System (DU) will be updated to version 8.1 and implemented during the weekend of June 19, 2010 to include these changes. No changes will be made to bankruptcies or strict foreclosure, so the present guidelines will continue to apply.

Below is a breakdown and time periods for the new changes.


Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & #FL and can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or

Comments (61)

Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

So, Fannie Mae sees Deed in Lieu in same light as short sales.  This is important for people to know.

May 16, 2010 08:21 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the information George.  Good to know.  Would love to see a comprehensive chart of all the players.

May 16, 2010 11:54 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Nick, thank you.  I am sure that others will find additional info on this to be helpful.

Don 5 years is the time frame for a Conventional Mortgage, but if they are able to go FHA they are still only requiring 3 years.  By the way Bill is always a good man to listen to :)

Christina, it seems to be a moving target these days, but for right now that is the way they are looking at it.

Gabe, I will try to post one on conventional foreclosures and bankruptcy's like some have asked for, and then I will see about posting one for FHA.


May 17, 2010 06:43 AM

George--this is helpful information and consistent with what I have telling my clients who are willing to just walk away. Acting with honor almost always is better than quitting. This scenario rewards the people who have shown some character.

May 17, 2010 07:15 AM
George, will the impact on credit score be greater with a dil than a ss. If so, will a short sale still be the best choice for those seeking to buy again asap? Thanks for the great info.
May 17, 2010 08:14 AM
Kent Dills
Broker, Dills Real Estate - Bellingham, WA
Real Estate 817-495-8028, Bellingham, Washington

George, just printed out your chart to keep in my package of stuff I use to present all the alternatives to short sale prospects.  Thank much, sir!

May 17, 2010 08:18 AM
Cindy Abel
Southern Nevada Realty, LLC - Las Vegas, NV
Broker/Owner - Las Vegas Homes and Real Estate

thanks for the information and chart.

May 17, 2010 12:21 PM
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

You are always providing great info to us.   I am amazed at the time frames on some things.

May 17, 2010 03:32 PM
Kathryn Maguire (757) 560-0881 - Chesapeake, VA
Serving Chesapeake, Norfolk, VA Beach

George, thanks for the latest information.  This will be helpful in counseling sessions with sellers who are underwater.

May 18, 2010 02:38 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Good information and I am going to reblog this for my clients.  Thank you very much.

May 18, 2010 05:11 AM
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

What does Fannie Mae consider "extenuating circumstances" in regard to the short sale?

May 18, 2010 07:10 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Eloise, I am sure that there probably has been other times like this, but recent years have brought about more changes than I can recall in the past.

Kent, I am glad that you will be making good use of the information, and good luck with it.

Cindy your welcome

Judi, these are areas that people should not take lightly when they are making their decisions.

Kathryn, homeowners underwater need all the information that they can get to make the best decision that they can, and I am glad that I could provide a little bit of it.

Gene, thank you for getting the word out there.

Damon the was the last point on the chart "2 years from completion date and a Max of 90 LTV".

May 18, 2010 08:28 AM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Does this chart mean it's easier and faster to get a loan after deed-in-lieu than it is after a short sale?

May 18, 2010 10:18 AM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

If this is the case then why would anyone want to go through the hassle of a short-sale?  Hand the home back to the bank and walk away.  I know someone who did this, but I don't know if the bank made him try to do a short-sale first.  Also, are there any tax implications for a deed in-lieu of foreclosure over a short sale?  When does the IRS consider foregiveness of a loan to be a taxable event? 

Thanks, George, this is really valuable information.  Makes me wonder if we'll have enough buyers for homes in the next few years with all these folks who can't get mortgages for a while.

May 25, 2010 04:15 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Dave they are about the same, but most often the Credit Report recognizes the Deed-In-Lieu of Foreclosure as a foreclosure, se it tends to create more headaches.

Gail, I don't know of a bank making a homeowner go through a short sale, and if the homeowner just walks away from the property without going through the steps of doing a Deed-In-Lieu of Foreclosure, then the bank will foreclose.  As far as your other questions, they would be best answered by an Accountant, I would just be guessing if I tried to answer them, and I try very hard not to guess.

May 26, 2010 04:01 AM
Ann Hayden 636-399-7544
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Chesterfield, MO


Congrats on the gold star!!

Ann Hayden in Wildwood, MO

May 27, 2010 01:15 AM
Valerie Osterhoudt
Johnson Real Estate, Inc. - Cromwell, CT
ABR, Cromwell, CT Real Estate ~ 860.883.8889

George.. This is good information and what we need to keep our clients informed.  Now it is just a matter of how long will it take the bank to get back to us.

Jun 06, 2010 03:31 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Valerie, well as we both know that could be a loooooooooong wait.

Jun 06, 2010 01:15 PM
Matt Robinson
Professional Investors Guild - Pensacola, FL

Very informative post.  Thanks for sharing the info.  I love staying up to date on anything related to short sales. 

Feb 24, 2011 04:25 AM
Sarasota & Manatee Counties FL
SaraMana Properties - - Bradenton, FL - Listings In Paradise

An informative blog post that I enjoyed reading! Thank you for sharing!

Jul 25, 2011 05:44 PM