New Fannie Mae rules for mortgage after DIL and short sale

Our mortgage is more than what the home is worth. We were told we can buy a new home, move into it, stop making payments on the townhome while setting up proceedings for a short sale on the townhome.Is that true? If so, are we still responsible for making payments until the home sells in short sale?

A lender will accept your short sale request only when you are delinquent on your mortgage payments. If you surrender the property to the lender and apply for a short sale, you won't be liable for the mortgage payments.

In order to help in the revival of the housing market, Fannie Mae has changed its rules regarding short sale and deed in lieu of foreclosure. As per the new rules, the homeowners who went through a short sale or a deed in lieu of foreclosure will now be able to get a loan after 2 years. This rule will be effective from 1st of July, 2010.

In order to take advantage of this new rule, the homeowners will have to meet certain criteria. Some of these are mentioned below:

• Homeowners will have to give 20% down payment while taking out the loan.
• If homeowners are facing layoffs or have to pay medical bills, they can pay 10% down payment for 2 years to qualify for a loan as per this new rule.
• Homeowners should rebuild their credit within these 2 years.

Experts are of the opinion that this is an effort on the part of Fannie Mae to encourage underwater borrowers to work with banks/lenders rather than simply walk away from the property. However, the criteria given by Fannie Mae, to qualify for a loan in 2 years, are quite tough. Thus, it's doubtful as to how may people will be able to take advantage of this new rule.

I've been reading that even if I meet the requirements, I may still have a tough time finding someone to finance me two years after a short sale. I'm told that the banks set their own requirements (which are even more strict than Fannie Mae). I understand that they will turn me away until a minimum of three years go by.

Do you believe this is true? Is there a bank or institution that anyone might suggest who can help me?

Thanks for your time

Welcome Mathina,

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http://www.mortgagefit.com/predeal/about39494.html

Take a look at it. Hope it helps you.