The Federal Housing Finance Authority ("FHFA") recently announced a policy change for FNMA and FHLMC regarding the sale of their REO inventory to the foreclosed party , but this change in policy will have a limited impact based upon information in a report published by Bloomberg News. Previously, if you were foreclosed out of your home by FNMA or FHLMC, you (or a third party on your behalf) could not buy back your home for its current value, but had to pay the balance that was due on the foreclosed mortgage. Under the policy change recently announced, foreclosed parties will now be eligible to buy their homes back from FNMA or FHLMC for the current value of the property. The policy change however does not eliminate the 3 year waiting period after foreclosure for regaining eligibility for a FNMA / FHLMC related mortgage loan. According to the Bloomberg report, this change in policy will affect only 121,000 properties across the country. The policy change is limited to those properties owned by FNMA / FHLMC as of November 25, 2014, only.
It is a step in the right direction according to FHFA Director Mel Watt. Watt also indicated that FHFA is working on an additional program to provide for debt reduction for those properties and borrowers who are underwater.
Image courtesy of totalmortgage.com
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