New Fannie Mae standards screwing us

[CreditGuy03]

We are eligible in 10 days to get a conventional loan since its two years after a short sale closed. Now I was informed that Fannie Mae changed the guidelines and on August 16 2014 you have to wait 4 years for conventional. 

How crappy is that? We were so excited to go shopping in 10 days now this.

Why did they change it up? 

[ShanetheMortgageMan]

Yup, the guideline change caught a lot of people off guard.  Fannie Mae will still do it at 2 years, but it needs to be because of extenuating circumstances.  FHA is still OK at the 3-year mark. 

I suspect Fannie Mae changed their guidelines to allign with Freddie Mac's, which require 4 years on a short sale (but just 2 if due to extenuating circumstances).  This also alligns with the push to get more private lending into the market place so not everyone is as reliant on Fannie/Freddie/FHA as they currently are.  We're already seeing non-conforming loan programs available for people 2 years out of short sale, the rates are a couple percentage points higher, similar to sub-prime but normally are fixed rates and without the prepay penalties.  I bet within the next 6-12 months there will be a nice little amount of lenders permitting 2 years after short sale but won't have as attactive rates as Fannie Mae offers.

[CreditGuy03]

Shane 

What other non conforming loans are out there right now two years after short sale?

Also were there alot private lenders out there before the crash?

[ShanetheMortgageMan]

There are quite a few - regional mortgage lenders are offering them.

One of the lenders we work with just came out with a conventional program that does 3 years out of foreclosure, 2 years out of short sale/deed-in-lieu, 2 years out of Ch 7 BK, and 2 years from Ch 13 BK discharge or dismissal.  Rates aren't spectactular, and usually comes with paying a point or two.

Before the crash there were literally hundreds of private (non-Fannie/Freddie/FHA/USDA/VA) lenders out there... the programs were labeled as sub-prime or Alt-A.  Greenpoint, Aurora Loan Services, American Brokers Conduit, Royal Banc of Canada were some of the most popular Alt-A lenders... New Century Mortgage, Ameriquest, Fremont Investment & Loan, First Franklin were some of the most popular sub-prime lenders.   Alt-A offered a little better rates than sub-prime, but without the prepay penalties and were normally 30-year fixed rates.

[CreditGuy03]

So if someone like me who is in texas what should I be looking for with regional lenders that offer those options

[ShanetheMortgageMan]

Texas is a fairly conservative lending state, so I'd imagine there'd be less options there than in say California, where out here is the wild wild west of lending... every new fangled loan program often enters the market here first.  Florida seems to get a lot of creative financing options as well.

Not sure what you should look for, other than a lender who can communicate clearly.  These new programs are pretty finicky and have a lot of specific guidelines one needs to be aware of.