Fannie Mae (FNMA) recently passed a new policy which makes a Short Sale a better solution for homeowners compared to Foreclosure.
Fannie Mae is a shareholder-owned company whose charter is to make sure mortgage loan funds are made available to mortgage lenders who make loans to home buyers. They don’t make loans directly to homebuyers, but work with mortgage banks via the secondary mortgage market. FNMA purchases mortgages from lenders and hold those mortgages in their portfolio, and they also issue Mortgage-Backed Securities. These basic financial services help to bring liquidity to the residential mortgage banking marketplace. .
Fannie Mae recently changed their underwriting policies for new mortgage loans for homeowners who have been caught in the recent mortgage loan crisis. Starting in August of 2008, the new guideline requires that a Orange County homeowner must wait five-years after the completion date of a foreclosure, before they will underwrite a new loan with such a home buyer. The previous requirement was only 4 years.
On the other hand, FNMA added a new guideline for Short Sales. Fannie Mae is now stating that a homeowner who conducts a successful short Sale, only needs to wait 2 years to reestablish credit prior to buying another home, compared to 5 years for a Foreclosure. This further adds to the other advantages that a Short Sale has compared to Foreclosure.
This is a huge advantage compared to Foreclosure. In 2 years, the local real estate market here in Orange County will have bottomed out, and possibly start to slightly appreciate. Whereas, 5 years from now, the market will probably be in full swing recovering mode and possibly appreciated substantially from the bottom of the market values.
For more information or questions regarding Short Sales in Orange County, please visit our website by clicking the previous link. Or feel free to email us at: Info@ShortSalesASAP.com or call: 949-388-3396
