Good news for failed borrowers who were negatively impacted during the financial crisis — Fannie Maeupdated the policy related to the minimum waiting periods following a preforeclosure sale or deed-in-lieu of foreclosure, making it easier for distressed borrowers to jump back into the market sooner, according to a new fact sheet released by Fannie.
In order to be eligible for a mortgage loan, Fannie requires borrowers to demonstrate that they have reestablished credit following a significant derogatory credit event, such as a foreclosure, bankruptcy, preforeclosure sale or deed-in-lieu.
Previously, the standard wait period was two years with a maximum 80% LTV and four years with a maximum 90% LTV, with standard eligibility after seven years. In extenuating circumstances, borrowers could wait only two years with a maximum 90% LTV.