Born Again: When will you be eligible for a mortgage after a foreclosure or short sale?
By Michael Mergell
(Michael Mergell, RE/MAX Legends Group)
Did you miss the fact that foreclosure filings were up 71% in the third quarter? Which makes it a good time to remind everyone of the rules that govern when and how you'll be eligible for a mortgage after you've been foreclosed, surrendered a deed, or negotiated a short sale. For borrowers with a foreclosure, short sale, or deed in lieu of foreclosure on their credit history, the following timelines apply before they'll be eligible for a conforming, conventional mortgage (Fannie Mae/Freddie Mac): •Foreclosure: 5 years from completion date, minimum 680 FICO and 10% down for 7 years, investment property, second homes, cash out refinances not allowed for 7 years. •Deed-in-Lieu of Foreclosure: 4 years, at least 10% down required for 7 years. •Short Sale: 2 years. 4 years for Freddie Mac For...
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