FNMA hasn’t changed the 3-year foreclosure guideline for about 18 months now. That much we knew. Short sales, however, are slightly different. We read in the underwriting guidelines that if you had a short sale on your credit you could be approved for a loan after two years with good re-established credit. Now, we know that investor guidelines are looking at “Short Sales” on credit as needing 3-years after completion to be eligible.
Fair Isaac, the credit reporting company, doesn’t have a specific category for short sales, but it does show on the credit report that the loans were settled for less than balance or “shorted”.
It is possible for the bank to report it differently such as “paid in full” negotiate with the bank on how they will report it and it doesn’t mean that it will report it that way every single time.
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