Saturday, April 24, 2010

New rules will help distressed homeowners to purchase again in the future.

This may be very good news for homeowners who have lost their home due to financial troubles either through foreclosure or a short sale. As it stands right now, these people have to wait a minimum of 4 years before they are eligible to qualify for a new mortgage. Fannie Mae has announced that it is relaxing this 4+ year waiting period to a minimum of 2 years if the Buyer can come up with a 20% down payment or 10% down and can show the hardship was directly attributable to extenuating circumstances.
Buyers will also have to have standard qualifying credit scores, which likely means quickly getting their credit back into shape if it has been significantly damaged from the financial hardship. The new rules are scheduled to go into effect July 1, 2010.

So I guess the bottom line is that if you're a homeowner who has lost your home through financial hardship and you can get to work asap on saving for a 20% down payment and repairing your credit, you may be able to once again own a home in just 2 short years! Hey, it's not perfect but it's better than having to wait 4-5 years! :)

From another point of view, hopefully this will not cause more foreclosures or short sales by encouraging people to simply "walk away" from their upside down mortgages since the repercussions are now less severe. Hmm...

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