Breaking NEWS: Fannie Mae Waives Foreclosure Part Of Bankruptcy Waiting Period

By Gustan Cho

Fannie Mae has announced that there will be new rules on homeowners who had a foreclosure part of bankruptcy.  Currently, if you had a foreclosure part of bankruptcy, the waiting period after a foreclosure to qualify for a residential mortgage loan does not start until the deed of the house is out of your name and into the name of the mortgage lender or the date of the sheriff’s sale.  Even though you have claimed your home as part of your bankruptcy petition and the bankruptcy trustee relieves you of your mortgage and you no longer are liable for your mortgage loan, the waiting period does not start until your name have been transferred off the title and transferred into the name of your mortgage lender and recorded in the office of the recorded of deeds and reflected in public records.

Waiting Period After Foreclosure

I get many calls every week where previous homeowners have put their home loan as part of their bankruptcy years ago but find out that their waiting period did not even start due to the fact that the mortgage lender has not transferred the foreclosed property into their names.  Some lenders seem to do this on purpose because this devastates the chances of a home buyer the ability to qualify for a new home loan.  Now, we are in luck.  Fannie Mae now will waive the standard rules on having a foreclosure part of bankruptcy and will allow homeowners who had a foreclosure part of bankruptcy to be able to purchase a home in 4 years.   As long as your foreclosure is part of bankruptcy and the lender has not transferred the name out of your name and into theirs, you are in luck.  The waiting clock starts from the date of your bankruptcy discharge date.

Excellent News For Those With Prior Foreclosure

You could not qualify for a conventional loan after a foreclosure until you have passed the 7 year waiting period after a foreclosure if you had a foreclosure part of bankruptcy.  Now you can qualify for a conventional mortgage loan with a 5% down payment in just 4 years after having a foreclosure part of bankruptcy.

New Fannie Mae Guidelines On Conventional Loan After Short Sale And Deed In Lieu

Many of my clients who had a deed in lieu of foreclosure or short sale used to qualify for a conventional loan after a short sale or deed in lieu with 20% down payment after 2 years of the deed in lieu or short sale.  Fannie Mae will be terminating the two year waiting period after a short sale or deed in lieu on August 16, 2014.  The new Fannie Mae mortgage lending guidelines on qualifying for a conventional loan after a short sale or deed in lieu will be 4 years.  You cannot qualify for a conventional loan after a short sale or deed in lieu of foreclosure after 2 years with 20% down payment.  The 20% down payment requirement is gone altogether.  Home buyers can qualify for a conventional loan after short sale or deed in lieu of foreclosure in 4 years with only 5% down payment.  Prior to this new Fannie Mae guideline, home buyers could qualify 4 years after short sale or deed in lieu of foreclosure with a mandatory 10% down payment.  Now, that is not the case.  The home buyer only needs a 5% down payment.

Related> Fannie Mae Waives  Waiting Period on Foreclosure after Bankruptcy

Related> Increasing waiting period to purchase after short sale

Related> Fannie Mae: New waiting period guidelines after short sale and deed in lieu

Related> Fannie Mae

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.