Columbia SC Homeowner's new rules let you get back into homeownership sooner after foreclosure -- in theory. But will lenders play nice?
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FHA and Fannie Mae are making it easier for Columbia SC homeowners who lost a home to foreclosure or short sale to buy again, but it might not make much difference if lenders don’t go along with the changes -- since they don’t have to.
First, here’s what’s new at FHA and Fannie:
FHA rules now let Columbia SC Homeowner's apply for an FHA mortgage 12 months after a foreclosure, short sale, or a deed-in-lieu of foreclosure if you meet two conditions:
1. Your loss was caused by economic conditions beyond your control. (Job Loss, Death, Illness ETC).
2. You complete housing counseling.
Note: Mortgage lenders have traditionally made Columbia SC homeowner's wait two years after a short sale or deed-in-lieu and seven years after a foreclosure to apply for a mortgage.
Once the Columbia SC homeowner has met the conditions, they will still have to meet all the usual mortgage loan rules and guidelines that lenders use for everyone -- like having enough income (and not too much debt) to afford the refinanced mortgage.
Fannie Mae credit reporting fix: Fannie, meanwhile, has cleared up a credit reporting issue that was holding back former Columbia SC homeowners who sold their homes for less than what they owed on the mortgage (a short sale) or signed over their deed to the lender to avoid foreclosure (a deed-in-lieu). Starting Nov. 16, 2013, the Fannie Mae loan underwriting system will automatically ignore the foreclosure and correctly recognize the transaction was a short sale when the code appears. Until then, Columbia SC lender's will have to manually underwrite your loan to take advantage of the change.
As always Columbia SC homeowner's need to remember that, Fannie Mae and FHA can change their own rules, but lenders don’t have to go along with the changes because the mortgage giants’ rules are simply minimum standards. Our sources say it’s likely that lenders will add their own, more restrictive rules.
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