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www.lasvegasmtg.com Report: Fannie Mae is taking the gloves off against Strategic Defaulters!

http://www.lasvegasmtg.com: Fannie Mae is taking the gloves off against Strategic Defaulters as they announced they are seeking to prevent any agency including FHA from financing a home loan for 7 years for any borrowers that were able to make the payments but decide not to.

USA Today reported this new initiative yesterday from Fannie Mae and the company is seeking legislative approval to bar those that have been prove to have strategically defaulted from getting any home loan for seven years. Currently there is a bill in the House of Representatives to make it a law banning strategic defaulters from getting any home loan for seven years. This would require the Senate to pass the bill and then be signed into law by the President.

If this passes then FHA would be banned from lending to strategic defaulters for the same time period. Currently any short sale or foreclosure is 3 years before a borrower can get a FHA loan. The question is how would Fannie Mae determine if a borrower has strategically defaulted. Fannie Mae will determine if the borrower still has other debt and is making payment on those debts. The question I would ask if there was a delinquency in mortgage payments would there still be credit to the borrowers? If there is no credit available then what would prevent the borrower to file Bankruptcy to eliminate the debt and the foreclosure debt as well?

Can this really be fixed with a law to stop Strategic Defaults? Please let me know what you think.

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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www.lasvegasmtg.com Report: Fannie Mae Relaxes rules on time of purchase after a Pre-Foreclosure sale has been announced and will be effective after July 1, 2010. Guidelines for Underwriters to follow after a Pre-Foreclosure Sale Or a Deed in Lieu of Foreclosure have always been in place, but  the waiting period has changed over the years. In 2006 the waiting period went from 3 years to 5 years before one would be able to purchase a home after a Pre-Foreclosure Sale or Deed In Lieu Foreclosure. Then in 2008 the guidelines were relaxed to 4 years to purchase a home. In April 14, 2010 Fannie Mae released news bulletin on the guideline changes and has reduced again the time frame from 4 years to 2 years from the Pre-Foreclosure Sale or Deed in Lieu of Foreclosure from the recorded anniversary date.

New Rules.

1. Borrowers with previous Deed In Lieu of Foreclosure with 20% down are eligible for a new loan 2 years, and waiting period will be  4 Years with 10% down.

2. Borrowers with previous Pre-Foreclosure Sale with 20% Down are eligible for a new loan 2 years.

3. Borrowers that have previously had a Pre Foreclosure Sale or Deed in Lieu of Foreclosures that was caused from extenuating circumstances will be eligible to buy a new home with only 10% down after 2 years.

4. Must meet the required time and have an Approved / Eligible from DU (Desktop Underwriting).

* It is interesting that Fannie Mae does not have any existing policy to address the Short Sale.

FANNIE Mae Interest Only ARMS

Fannie Mae is tightening the requirements for the use of interest only Arm's effective August 31, 2010. The requirements are designed to insure only those that are qualified will be able to use this loan program.

1. Borrowers will be required to have a minimum of 720 FICO Score.

2. Borrowers will be required to have 30% down.

3. Borrowers will be required to have two years in housing payment in reserves.

Fannie Mae Adjustable ARMS

Fannie Mae will also change the qualifying guidelines for Adjustable ARMS.

1. Borrowers will be required to qualify for the Adjustable Arm's with two points higher then the start rate. 

Opinion:

While Fannie Mae has taken extreme heat for the housing crash with loose requirement guidelines, Fannie Mae has defended the new requirements by stating that the new requirements will have consumers use these loan programs as a financial tool and not as a affordability tool.

Fannie Mae shortening the time frame for borrowers that have opted to do a Pre-Foreclosure Sale or a Deed In Lieu of Foreclosure who now has reached the two year mark will now be eligible After July 1st, 2010 to purchase another house.

The use of Interest Only Arms and Adjustable Arms will make investment brokers and investors re-evaluate these loan programs and the tighter requirements might make these loan programs obsolete.

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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