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With the goal of “supporting overall market stability and reinforcing the importance of borrowers working with their servicers,” Fannie Mae on April 14 announced that it is making it easier for distressed borrowers to purchase new homes in the future.
Fannie Mae’s Announcement SEL-2010-05 describes changes designed to reward home owners who worked with their loan servicers when they experienced difficulty repaying their mortgage debt.
Under the new policies, home owners who avoided foreclosure by exercising pre-foreclosure solutions — such as deed-in-lieu of foreclosures, short sales and pre-foreclosure sales — will have a shorter time to wait until they can qualify for a new mortgage to buy another home.
Currently, borrowers have to wait four years after a deed-in-lieu of foreclosure. Under the new policies, those who make a downpayment of 20% can qualify to reenter the housing market in two years. Under extenuating circumstances — such as the loss of a job — they will only have to put 10% down.
Fannie Mae said it changed its policies to address the needs of the housing market following the recession and to help borrowers who have made an effort to stave off foreclosure by working with their lenders.
Allowing borrowers to reenter the home purchase market in two years instead of four will also benefit home builders, mortgage lenders and Realtors® and contribute to the ongoing housing recovery.
For more information, e-mail Steve Linville at NAHB, or call him at 800-368-5242 x8597.
Register for the 2010 Spring Construction Forecast Conference webinar to be held from 2:00-4:00 p.m. EDT on Tuesday, May 18.
Mark Zandi, of Moody’s Analytics, and Chris Varvares, of Macroeconomic Advisers, will join NAHB Chief Economist David Crowe for a macro-level look at the state of the nation’s economy and its impact on housing.
To register, visit www.nahb.org/cfc.