Quicker and Easier Access to Mortgages After Foreclosure


Fannie Mae has announced new rules under which people who have gone through foreclosure sale or faced deed-in-lieu of foreclosure can obtain a mortgage loan to buy a house once again. The minimum waiting period after the event has been reduced. The requirements applying to the loan-to-value ratio of the new mortgage loan have been removed.

Under the previous rules set by Fannie May, prospect home buyers had to wait for 2 years after the completion of a short sale in order to obtain a mortgage loan with LTV of 80%. If they required a home loan with LTV over 90%, they had to wait for 4 years. The standard waiting period after the completion of foreclosure was 7 years. In the presence of extenuating circumstances which led to the short sale, the previous homeowners had to wait for 2 years in order to access a mortgage with LTV of 90%. Extenuating circumstances are one-off events which the borrower cannot control and which lead to unexpected, considerable and long-lasting decrease in income or increase in financial obligations.

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Under the new rules introduced by the company, the standard waiting period for accessing a mortgage loan after foreclosure is 4 years. It is nearly two times shorter. Borrowers who faced deed-in-lieu of foreclosure, but there were extenuating circumstances can apply for a home loan 2 years after the event took place. There are no LTV requirements applicable to the prospect home buyers. After the 4-year waiting period expires, previously distressed borrowers can apply for loans with any LTV.

The new rules will apply to all mortgage loan applications which are filed after August 16th 2014. All previously distressed borrowers must demonstrate that they have re-established credit following the adverse event. This along with the provision of a down payment is among the major eligibility criteria.



Jessie Jessie is a corporate communications and public relations professional skilled in media relations, strategic communications, crisis and issues management, writing and editing. She excels in managing multiple, high-priority tasks and working in high-stakes environments. Jessie has more than 10 years experience writing editing both print and online content. She is a graduate of Illinois State University with a Masters degree in English and writing.

Contact: jessie@mortgage.info

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