Lenders Requiring Delinquency/Non-Delinquency For Short Sale Update

LENDERS REQUIRING DELINQUENCY/NON-DELINQUENCY FOR SHORT SALE UPDATE:

U.S. Bank: as of 5.2.2014, will allow an FHA mortgage holder to proceed with short sale with less than 90 days delinquency, which was required 30 days ago.

Wells Fargo: As of 4/17/2014, will allow homeowner to apply for short sale without delinquency but with hardship. Homeowner in process for 5th time.

Fannie Mae (Federal National Mortgage Association (FNMA) ): will approve homeowner with hardship for short sale without delinquency. Homeowner closed 6/2014.


Past Short Sellers Can Be Homeowners Again!

  • Please note that this problem only existed for conventional mortgages for Fannie Mae and Freddie Mac. Because of the parallel Total Scorecard automated system, FHA and VA loans are not denied in the system. Both Fannie Mae’s Desktop Underwriter/Originator and Freddie Mac’s Loan Prospector require an underwriter to verify the past mortgage was not a foreclosure.
  • The Fannie Mae”fix” did not work on Nov. 16, 2013. However, filing the complaint that with the CFPB does commonly result in the short sale credit code being downgraded.
  • On August 16, 2014, Fannie Mae came out with a workaround that does work. And the Fannie Mae Desktop Underwriter/Originator automated approval system is not providing a denial or “Refer with Caution” for past short sales in most cases. However, the Freddie Mac Loan Prospector automated system still provides a denial.