Fannie Mae's latest update continues to tighten the rules for loan approval.  The new version of D esk Top Underwriting, Fannie Mae's automated underwriting system begins December 12, 2009  

·       maximum Debt to Income Ratio will now be 45% down from 55%

·       2 months reserves required for all second homes, and 6 months reserves for all investment properties

·       minimum 4 years required after dismissal or discharge of Chapter 7 bankruptcy--no exceptions

·       minimum 2 years required after dismissal or 4 years after discharge on chapter 13 bankruptcy--no exceptions

·       minimum 5 years required after multiple bankruptcies

·       minimum 5 years required after foreclosure, with some additional restrictions up to 7 years

·       minimum 4 years required after deed-in-lieu of foreclosure, with additional restrictions up to 7 years

·       minimum 2 years required after a short sale

·       credit report can't be more than 90 days old at time of closing

·       trailing co-borrower income not permitted

·       value of stocks, bonds, mutual funds and retirement accts for reserves has been reduced

·       lower maximum LTVs for 2-unit properties (now 95%, going to 80% for primary residence purchase)

According to the guidelines, it is much better for a distressed homeowner to do a short sale than to allow the home to be foreclosed.  If you want to discuss short sales, foreclosures or anything real estate related, call me.  I want to be your real estate resource.  

leslie edwards                                                                                                      770-460-9448 leslie@leslieedwards.com