Today Fannie Mae has announced that on August 16, 2014, they will be changing the waiting period associated with the purchase of a any home after a short sale (or a deed in lieu of foreclosure), FROM A MINIMUM OF TWO YEARS, TO FOUR YEARS.
If you have a prospective buyer which fits this profile and is “on the fence”, they will need to get their loan application “D/U” approved before the August 15th deadline.
To beat the deadline they don’t have to have a home picked out OR be in escrow; they simply must apply for the “DU” (which can take up to 3-5 days as everyone will be rushing to beat the deadline).
The added costs are:
1) 1.75% funding fee at COE
2) A monthly mortgage insurance premium of 1.35%.
Based on a purchase price of $350k (280k loan amount) your buyer will pay:
1) $4900 up front MI fee
2) $315 per month until they can refi into a conventional loan.
Got this from Dan Dobbs- He is a mortgage broker and sends good info
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