Here’s a little bit of good news for people who have filed for bankruptcy, but are wishing they could buy a property again.
As of July 29, 2014, Fannie Mae has relaxed its rules for qualifying for a mortgage with a bankruptcy on your record.
While bankruptcy can be listed on your credit record for up to ten years, Fannie Mae will approve applications for would-be owners two years after filing.
However, for a long time, Fannie Mae has had a separate rule that homeowners with a foreclosure on their credit had to wait three years to apply for a new mortgage. That created some problems because even when people file bankruptcy to get out of an upside down house, the mortgage lenders and servicers would often drag their feet on foreclosing.
But now, Fannie Mae has announced it has eliminated the three year rule on foreclossures. So all anyone has to wait is two years after bankruptcy and they can try for a FNMA backed mortgage again.
That’s only fair. It’s not your fault if the mortgage company never gets around to foreclosing. And it’s good for the economy. More new houses can get built and sold sooner. Great news all around.