Fannie Mae Tightens Rules for Mortgages

Wall Street Journal (04/02/08) P. A3; Hagerty, James R.
Fannie Mae recently imposed stricter rules for the mortgages it purchases or guarantees, including a 580 minimum credit score for individual loans purchases. Additionally, the government-sponsored enterprise extended by one year the period following foreclosure that is needed for borrowers to re-establish credit to five years. However, Fannie Mae says it will purchase mortgages with credit scores under 580 and permit credit recovery periods of less than five years in certain situations. With regard to servicers, the company boosted the maximum forbearance period to six months from four months in an effort to minimize losses from foreclosures.