Fannie Mae Views Loan Mods as Short Sales for Purpose of Refi or Purchase
According to one of our lenders, there are new underwriting guidelines, Fannie Mae will now view loan mods as short sales for the purposes of doing a refinance or a purchase.
What does this mean?
- Even if a borrower was able to obtain a loan modification without ever being late on a payment, that borrower will still be treated as though he had done a short sale and will be subject to the restrictions and guidelines of someone who had actually done a short sale.
- This means that if you obtain a loan modification, you may have to wait three years or more to refinance a property or to buy a new one if you are obtaining a Fannie Mae loan.
- This may take additional otherwise qualified buyers out of the real estate market, placing additional pressures on the market because Fannie Mae is such a large portion of the mortgage market.
If this doesn’t make sense to you, don’t worry, it doesn’t make a lot of sense to me either. However, we aren’t writing the underwriting guidelines.
So what do you think? Does this make sense?