English: if you are looking to buy a house with financing and it will be fund by Fannie Mae, then you need to follow these guidelines in case of derogatory credit (bad credit, keep reading)

Espanol: si usted esta interesado en adquirir una propiedad y su prestamo va a ser financiado por Fannie Mae necesita seguir las siguientes regas si usted tiene los siguientes casos de mal credito. (!Sigua leyendo!)

The following information is from © 2009 FANNIE MAE. All Rights Reserved.

(04/01/2009)

General Information

The presence of significant derogatory credit information dramatically increases the likelihood of a future default and represents a significantly higher level of default risk. Examples of significant derogatory credit include bankruptcies, judgments, collection accounts, foreclosures, deeds-in-lieu, or a consistent pattern of delinquent accounts.

La presencia de informacion incorrecta en su reporte de credito incrementa la posibilidad de que en el futuro deje de pagar su deuda y aumenta significativamente el riesgo. Ejemplos de mal credito son, bancarrotas, juicios, cuentas de colleccion, foreclosure, deeds in lieu y/o un constante perfil de cuentas pagadas o pagadas tarde.

The lender must determine the cause and significance of the derogatory information, verify that sufficient time has elapsed since the date of the last derogatory information, and confirm that the borrower has reestablished acceptable credit history. The lender must make the final decision about the acceptability of a borrower's credit history when significant derogatory credit information exists.

El banco debe determinar las causa y la importancia del porque de esa informacion. Verificar su ha pasado el tiempo suficiente para establecer un mejor credito. Asi como tambien determinar que tan correcta es la informacion en el reporte de credito.

Bankruptcy (Chapter 7 or Chapter 11)

A four-year period is required to re-establish credit, measured from the discharge or dismissal date of the bankruptcy action.

Un periodo de 4 años debe de pasar y haber reestablecido el credito, desde la fecha en que fue terminada la bancarrota.

Exceptions for Extenuating Circumstances

A two-year period is required to re-establish credit, measured from the discharge or dismissal date of the bankruptcy action.

Bankruptcy (Chapter 13)

A distinction is made between Chapter 13 bankruptcies that were discharged and those that were dismissed. The time period required to re-establish credit for Chapter 13 bankruptcy actions is measured as follows:

• two years from the discharge date, or
• four years from the dismissal date.

This policy recognizes that borrowers have reestablished credit through the successful completion of a Chapter 13 plan and subsequent discharge by requiring only a two-year time period to elapse.

A borrower who was unable to complete the Chapter 13 plan and received a dismissal will be held to a four-year time period for reestablishing credit.

Exceptions for Extenuating Circumstances

No exceptions are permitted to the two-year time period after a Chapter 13 discharge.

Multiple Bankruptcy Filings

For a borrower with more than one bankruptcy filing within the past seven years, a five-year period is required to re-establish credit, measured from the most recent dismissal or discharge date.

Note: The presence of multiple bankruptcies in the borrower's credit history is evidence of significant derogatory credit and increases the likelihood of future default.

Exceptions for Extenuating Circumstances

A three-year time period is required to re-establish credit, measured from the most recent discharge or dismissal date. The most recent bankruptcy filing must have been the result of extenuating circumstances.

Foreclosure

A five-year period is required to re-establish credit, measured from the completion date of the foreclosure action as reported on the credit report or other foreclosure documents provided by the borrower.

Un periodo de 5 años es requerido asi como el establecimiento de un credito desde la fecha en que se ejecuto el foreclosure.

Additional requirements apply after five years up to seven years following the completion date:

Se le puede requerir mas informacion y requsitos despues de los 5 años y antes de los 7:

• The purchase of a principal residence is permitted with a minimum 10% down payment and minimum representative credit score of 680.
• Adquirir una propiedad para habitarla usted mismo no renta( con un mínima del 10% de down payment y un puntaje de credito de 680 como minimo.
• The purchase of a second home or investment property is not permitted.
• Adquirir una segunda casa o de inversion no es permitido.
• Limited cash-out refinances are permitted for all occupancy types pursuant to the eligibility requirements in effect at that time.
• Cash-out refinances are not permitted for any occupancy type.

Exceptions for Extenuating Circumstances

A three-year period is required to re-establish credit, measured from the completion date of the foreclosure action.

The additional requirements listed above apply after three years and up to seven years following the completion date, except the minimum credit score of 680 is not required.

Deed in Lieu of Foreclosure

A four-year period is required to re-establish credit, measured from the completion date (the date the deed-in-lieu was executed).

Additional requirements that apply after four years and up to seven years following the completion date:

• The borrower may purchase a property secured by a principal residence, second home, or investment property with the greater of 10% minimum down payment or the minimum down payment required for the transaction.
• Limited cash-out and cash-out refinance transactions secured by a principal residence, second home, or investment property are permitted pursuant to the eligibility requirements in effect at that time.

Exceptions for Extenuating Circumstances

A two-year period is required to re-establish credit, measured from the completion date.

The additional requirements listed above apply after two years and up to seven years following the completion date.

Preforeclosure Sale

A two-year period is required to re-establish credit, measured from the completion date.

Exceptions for Extenuating Circumstances

None.