Jun 10
7
As of May 27, 2010, Fannie Mae will not back or purchase loans made on foreclosed homes still inside the state foreclosure redemption period. That’s the time period in which a homeowner can come back and reclaim their home by paying all past due amounts and costs of foreclosure, as well as for improvements. It’s usually such a large amount that this is a rare thing, but Fannie Mae doesn’t want the risk. In my state of Oregon, the redemption period is 180 days. An entire list of each state can be found at this link. Here’s a quote from their announcement:
Certain state laws provide for a “redemption period” after a foreclosure or tax sale has occurred, during which time the prior owner may reclaim the property upon payment of all amounts owed. Unexpired redemption periods create an unacceptable title defect on the subject property, and do not conform to the existing policy that requires the property to have “good and marketable” title. As such, Fannie Mae is clarifying the Selling Guide to state that properties with unexpired redemption periods have unacceptable title defects. Therefore, these mortgage loans are not eligible for delivery to Fannie Mae until after the expiration of the redemption period. The purchase of additional insurance, a redemption bond or similar coverage during the redemption period does not remedy the title defect and the mortgage loan remains ineligible for delivery to Fannie Mae.
Good Luck! And happy hunting for those foreclosures!
