Homeowners who’ve been through foreclosure generally can’t get a mortgage for seven years if they’re going through a lender who’s planning to sell the loan to Fannie Mae. A short sale will disqualify them for only two.

But Fannie Mae’s automated loan underwriting system can’t tell the difference between a short sale and a foreclosure, requiring loan underwriters to use a more laborious manual process to get borrowers who’ve been through a short sale approved for a Fannie Mae loan.

Fannie Mae says a new code being implemented Nov. 16 will let loan originators tell the automated system when a foreclosure was really a short sale, avoiding the need to use the manual underwriting process. Source: marketwatch.com

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top