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Monday, July 21, 2014

Short sale within the last 4 years?

Bad news for buyers who’ve had a short sale within the last 4 years (and who now have a 20% down payment); they now will be forced to fund their loan with an FHA loan!
Today Fannie Mae has announced that on August 16, 2014, they will be changing the waiting period associated with the purchase of a any home after a short sale (or a deed in lieu of foreclosure), FROM A MINIMUM OF TWO YEARS, TO FOUR YEARS.
If you are a prospective buyer which fits this profile and is “on the fence”, you will need to get your loan application “D/U” approved before the August 15th deadline.
To beat the deadline you don't have to have a home picked out OR be in escrowyou simply must apply for the “DU” (which can take up to 3-5 days as everyone will be rushing to beat the deadline).
The added costs are:
1) 1.75% funding fee at COE
2) A monthly mortgage insurance premium of 1.35%.
Based on a purchase price of $350k (280k loan amount) you will likely pay:
1) $4900 up front MI fee
2) $315 per month until they can refi into a conventional loan.
Editor’s Note: Freddie Mac has announced whether they will follow suit, I’ll keep you posted as the info unfolds.

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