By November, Fannie Mae hopes to have corrected a problem tied to reporting distressed homes. The company did not have an automated way to distinguish between foreclosures and short sales, but its credit reporting update should make it easier and faster for people who pursue short sales to qualify for financing again.
Foreclosures hurt a borrower's credit more than short sales, with foreclosed homeowners unable to buy again for seven years. However, people who go through short sales have to wait only three years. The update could be key in Florida, where short sales accounted for 28 percent of sales in June, according to RealtyTrac.