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Fannie Mae's Latest Guidance for Foreclosures, Bankruptcies, & Short Sales

By Rodney Mason, VP of Mtg Lending

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

September 25, 2010 05:54 AM

Fannie Mae has updated its polices regarding new financing for borrowers with a previous bankruptcy, foreclosure, or short sale. The waiting period ranges from 2 years from the discharge date of a Chapter 13 Bankruptcy to 7 years from the date of a Foreclosure.

Derogatory Event	Waiting Period Requirements	Waiting Period with Extenuating Circumstances
Bankruptcy – Chapter 7 or 11	4 years	2 years
Bankruptcy – Chapter 13	2 years from discharge date 4 years from dismissal date	2 years from discharge date 2 years from dismissal date
Multiple Bankruptcy Filings	5 years if more than one filing within the past 7 years	3 years from the most recent discharge or dismissal date
Foreclosure	7 years	3 years Additional requirements after 3 years up to 7 years: 90% maximum LTV Purchase, Principal residence Limited cash-out refinance, all occupancy types
Deed-in-Lieu of Foreclosure	2 years – 80% maximum LTV 4 years – 90% maximum LTV 7 years – LTV ratios per the Eligibility Matrix	2 years – 90% maximum LTV
Pre-foreclosure Sale	2 years – 80% maximum LTV 4 years – 90% maximum LTV 7 years – LTV ratios per the Eligibility Matrix	2 years – 90% maximum LTV
Short Sale	2 years – 80% maximum LTV 4 years – 90% maximum LTV 7 years – LTV ratios per the Eligibility Matrix	2 years – 90% maximum LTV

All borrowers will now be required to meet the minimum waiting period after the derogatory event in order to be eligible for a new conventional mortgage loan backed by Fannie Mae.