The derogatory credit policy as outlined below must be applied to all Freddie Mac loans, including loans run through LP. Be sure you understand the consequences before you make a credit altering decision!
Short Sale:
All short sales are now considered derogatory credit
If the short sale was due to extenuating circumstances, the recovery time period for re-establishment of credit is 24 months from the date of completion
If the short sale was due to financial mismanagement, the recovery time period for re-establishment of credit is 48 months from the date of completion
Bankruptcy:
If a Chapter 13 bankruptcy is caused by financial mismanagement, the recovery time period for re-establishment of credit is 48 months from dismissal date
The existing requirement of 24 months from discharge date remains in effect
Foreclosure:
If a foreclosure is caused by financial mismanagement, the recovery time period for re-establishment of credit is 84 months
