Fannie Guides: Section B3-5.4-07 Significant Derogatory Credit Events – Waiting Periods and Re-establishing Credit (05/28/2013)
Note: The terms “pre-foreclosure sale” and “short sale” are used interchangeably in this
Guide and have the same meaning (see Deed-in-Lieu of Foreclosure and Pre-foreclosure Sale below).
Deed-in-Lieu of Foreclosure and Pre-foreclosure Sale
These transaction types are completed as alternatives to foreclosure.
A deed-in-lieu of foreclosure is a transaction in which the deed to the real property is transferred back to the servicer.
A pre-foreclosure sale or short sale is the sale of a property in lieu of a foreclosure
resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.
The following waiting period requirements apply:
Exceptions for Extenuating Circumstances
A two-year waiting period is permitted if extenuating circumstances can be documented, with maximum LTV, CLTV, or
HCLTV ratios of the lesser of 90% or…
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