Fannie Mae Guidelines Update: No new mortgages for 7 YEARS after foreclosure

Fannie Mae Guidelines Update: No new mortgages for 7 YEARS after foreclosure

Fannie Mae has recently introduced new guidelines for mortgage underwriting, and is getting tougher on those who have experienced a prior foreclosure.

The time that must have elapsed after a foreclosure is up to 7 years from the previous 5. The changes highlight the importance of borrowers working with their servicers to avoid foreclosure and pursue other workout solutions, including short sales. 

Fannie Mae Waiting Period Requirements as of 10/1/2010

BANKRUPTCY Chapter 7 or 11: 4 years

BANKRUPTCY Chapter 13: 2 years from discharge date or 4 years from dismissal date

FORECLOSURE: 7 years

DEED IN LIEU OF FORECLOSURE, PREFORECLOSURE SALE, SHORT SALE:

• 2 years - 80% maximum LTV
• 4 years - 90% maximum LTV
• 7 years - LTV ratios per the Eligibility Matrix 

Exceptions to the waiting periods can be made for qualifying extenuating circumstances. Read the full announcement HERE.