Fannie Mae Changes Deed-in-Lieu Rules
The Federal National Mortgage Association, Fannie Mae (FNMA), recently changed its policies regarding deeds-in-lieu-of-foreclosure, by shortening the waiting period from four to two years for getting a new loan. This modification has been made “to reinforce the importance of borrowers working with their servicers when they are having difficulty repaying their debt,” per FNMA.
They are referencing properties that are “underwater,” where the value is less than the loan amount. The new rules are for loan applications completed after June 30th of this year. Ostensibly, FNMA is making it easier for those who follow their procedures to be approved for a future home loan. For information about Fannie Mae, check out the Fannie Mae Web site. The California Association of Realtors has provided a Deed-in-lieu FAQ which I’ve posted as a PDF (Adobe Acrobat reader required).
Important: There are numerous, important legal and tax implications to the route chosen by homeowners of distressed properties. They need to be sure to consult with a knowledgeable attorney and tax advisor before making any decisions.