Amongst the various recent changes to their Selling Guide, Fannie Mae announced specific changes to their significant derogatory credit events policies. Fannie Mae’s Waiting Period for Mortgage Debt Discharged through Bankruptcy policy now clarifies which timeframe a borrower will be held to in the event of a mortgage debt that was discharged in a bankruptcy, but the lender reclaimed the property through foreclosure action. The Waiting Period after a Preforeclosure Sale or Deed-in-Lieu of Foreclosure policy changes simplifies the timeline determination for borrowers who experienced a short sale or deed-in-lieu and eliminates the previous loan-to-value restrictions. Finally, Fannie Mae announced the creation of a new policy called, Charge Off Accounts – Mortgage Debt. This policy is established to address the waiting period a borrower will be held to prior to reapplying for a mortgage after a mortgage account has been charged-off.
The policy changes for Fannie Mae’s Waiting Period for Mortgage Debt Discharged through Bankruptcy policy will be effective immediately while the changes to the Waiting Period after a Preforeclosure Sale or Deed-in-Lieu of Foreclosure and the Charge Off Accounts – Mortgage Debt policies will be effective for mortgage loan applications dated on or after August 16, 2014. To read Fannie Mae’s Selling Guide announcement, visit http://bit.ly/1ADMFjj.