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Answers (14)
- Jared Leichliter, "Jared Leichliter"
- Contributions:4
There are different timelines involved with buying a home after short sale.
If you weren't late on the mortgage during the short sale process it is possible to buy immediately with FHA if you have a valid reason for the short sale.
If there were late payments you will have to wait 2 years for a conventional loan or 3 years for FHA with late payments.
Give me a call and we can discuss your options
Jared Leichliter
Mortgage Wholesale Network
888-842-4452
- JoEllen Ufner - ABR,GRI,SFR, "jufner"
- Contributions:397
In my experience at least two year however it will then depend on income, debt to income credit score and th elike...so plan on at least two years...best of luck
- Charles Dailey, "charlesdailey"
- Contributions:7
If you have any mortgage lates through the short sale process and/or are buying a home subsequent to a short sale that is similar or superior within a reasonable commuting distance, then the wait period would be 3 years or two with extenuating circumstances (but that explanation better be a good one).
If there are no lates and one is buying a home after a short sale that isn't similar or superior to the one that was sold, then the waiting period doesn't exist for FHA. All other FHA loan restrictions apply.
It's not a white elephant. I've done several of them. They're not easy but they're doable. The hardest part is getting something from your previous mortgage company stating that the proceeds of the sale served as payment in full. 2nd mortgage companies are terrible with this. Others aren't. In some states, there are laws that prevent deficiency judgments so this guideline can be easier to deal with (CA and NC for instance).
Here's a couple web references you might find helpful:
Web Reference 1
Web Reference 2
If there are no lates and one is buying a home after a short sale that isn't similar or superior to the one that was sold, then the waiting period doesn't exist for FHA. All other FHA loan restrictions apply.
It's not a white elephant. I've done several of them. They're not easy but they're doable. The hardest part is getting something from your previous mortgage company stating that the proceeds of the sale served as payment in full. 2nd mortgage companies are terrible with this. Others aren't. In some states, there are laws that prevent deficiency judgments so this guideline can be easier to deal with (CA and NC for instance).
Here's a couple web references you might find helpful:
Web Reference 1
Web Reference 2
- Stephanie McCarty, "snellvilleagent"
- Contributions:521
Clark Howard (consumer advocate on radio) addressed this question today on his radio show. He said that banks are now hitting your credit just as hard for a short sale as they do for foreclosure. He told the caller that he may not be able to get another home mortgage for several years - it depends on specific circumstances.
- David Lauletta, "VC Realty Group"
- Contributions:11
Fellow Realtors,
Please excuse my self promotion in my response, I just read the "Good Neighbor Policy" and realize it is frowned upon. I just started responding to questions recently.
Thanks
- Janet Dorsey, "VCLiving"
- Contributions:2
While the GSEs (Fannie Mae and Freddie Mac) and FHA have guidelines of 2 years before being able to lend to a homeowner that went through a successful short sale, most lenders are using additional overlay guidelines that make it more difficult to obtain a loan.
To really understand how you might be able to obtain a loan, you should talk to both a direct lender and a good, reputable mortgage broker that has access to numerous lenders. If you find you can't obtain a loan today, keep trying. The guidelines, rules and regulations are constantly changing, so it's a good idea to periodically check with these lenders to determine your eligibility for a loan. Establish a good relationship with them and you'll be able to check in without having to go through the hassle of resending your financial information each time. And, once you're eligible, you'll already know who you can trust to get you the best rate and terms.
To really understand how you might be able to obtain a loan, you should talk to both a direct lender and a good, reputable mortgage broker that has access to numerous lenders. If you find you can't obtain a loan today, keep trying. The guidelines, rules and regulations are constantly changing, so it's a good idea to periodically check with these lenders to determine your eligibility for a loan. Establish a good relationship with them and you'll be able to check in without having to go through the hassle of resending your financial information each time. And, once you're eligible, you'll already know who you can trust to get you the best rate and terms.
- John Wise, "1wisedad"
- Contributions:28
DGE75,
Here is the link to the actual guideline from FannieMae on their guidelines for borrowers with past Short Sale. 2 years 80% max LTV, 4 years, 90% max LTV.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1005.pdf
VA Guidelines are 2 years, but underwriters can make exceptions for extenuating circumstances. I would highly advise you to speak with a good mortgage lender.
John Wise
2ci Direct Real Estate
Camarillo, CA
Here is the link to the actual guideline from FannieMae on their guidelines for borrowers with past Short Sale. 2 years 80% max LTV, 4 years, 90% max LTV.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1005.pdf
VA Guidelines are 2 years, but underwriters can make exceptions for extenuating circumstances. I would highly advise you to speak with a good mortgage lender.
John Wise
2ci Direct Real Estate
Camarillo, CA
- Christine McGinty, "whitemountainagent"
- Contributions:273
Any of you that are getting loans through at 2 years after a short sale, please forward me the information on who is doing them because I'm not finding any lender doing them in 2 years here in AZ even with 20% (or more) down conventional. FHA said you can get a loan right away if you kept your payments current, but the catcher there is anyone doing an FHA short sale (pre-forclosure which in one in the same for FHA) must be delinquent for a miniumum of 31 days for them to consider a short sale. Please refer to http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf
Thanks.
Thanks.
- Diane Smugeresky, "jesuschrysler"
- Contributions:63
Typically, 2 yrs. It will depend on how good your credit has been as well during this time !
- Ed Brophy, "Ed Brophy"
- Contributions:455
That depends on the facts about your short sale. Did you miss any mortgage or other credit payments in the 12 months prior to the completion of the short sale?
If the answer is yes, you'll have to wait 2 years.
If the answer is no, you must have some extenuating circumstances that can be well documented such as a job loss or divorce. Read Buying a home after short sale for more information and current basic guidelines.
If you meet the current guidelines that went into effect July 1, 2010, know that approvals are handled on a case by case basis and may be subject to additional guidelines put in place by the banks.
If the answer is yes, you'll have to wait 2 years.
If the answer is no, you must have some extenuating circumstances that can be well documented such as a job loss or divorce. Read Buying a home after short sale for more information and current basic guidelines.
If you meet the current guidelines that went into effect July 1, 2010, know that approvals are handled on a case by case basis and may be subject to additional guidelines put in place by the banks.
- Christine McGinty, "whitemountainagent"
- Contributions:273
David Laulette...please refer to the Good Neighbor Policy when posting. No self promotion is allowed.
- Christine McGinty, "whitemountainagent"
- Contributions:273
I've worked with several clients that have gone through short sales in the last couple years and the news is grim at best. Underwriters are treating short sales pretty much the same as a foreclosure. Here are the guidelines I've found after doing extensive research:
Conventional with 10% down - 4 years (Foreclosure 4 years)
Conventional with 20% down - 2 years (Foreclosure 4 years)
(I've had several lenders tell me they won't do financing after a short sale on conventional for 4 years regardless of downpayment and haven't found one yet that will accept the 2 year timeframe. If someone out there hears of one, let me know)
FHA - 3 years (Foreclosure 3 years). You can go to http://www.hud.gov/offices/hsg/sfh/faqs/atl1cre.cfm#anchor6715 to read about CAIVRS scores which are impacted after a short sale and other information regarding financing after short sales.
I had a client that had a huge downpayment and still couldn't get financing after his short sale. He just has to wait it out.
These timeframes are IF the person has had good credit since short sale so it's imperative to keep your credit clean after the short sale.
Another thing to note is the time period clock doesn't start ticking until the settlement has been made. My client closed in Sept. but FHA didn't actually settle until mid November so that's when they start the clock.
This of course is all subject to change and with the ever growing number of short sales, we're hopeful these guidelines change for the better in the future. My feeling is if a person had a legitimate hardship (loss of job, had to move because of job transfer etc) and can prove it and didn't bail out just because their house was underwater, they should be given some leiniency, but obviously our system isn't seeing that this time.
I would suggest you talk to a lender anyway to see how hard your credit was hit. Some are suprisingly good but still have to wait out the time period and either keep checking back with your lender or have your lender keep you informed of any changes that come up.
The one pro....if you wait out the 3 years, you will once again be considered a first time homebuyer and may be able to qualify for programs if they have any in place at that time. Good luck
Conventional with 10% down - 4 years (Foreclosure 4 years)
Conventional with 20% down - 2 years (Foreclosure 4 years)
(I've had several lenders tell me they won't do financing after a short sale on conventional for 4 years regardless of downpayment and haven't found one yet that will accept the 2 year timeframe. If someone out there hears of one, let me know)
FHA - 3 years (Foreclosure 3 years). You can go to http://www.hud.gov/offices/hsg/sfh/faqs/atl1cre.cfm#anchor6715 to read about CAIVRS scores which are impacted after a short sale and other information regarding financing after short sales.
I had a client that had a huge downpayment and still couldn't get financing after his short sale. He just has to wait it out.
These timeframes are IF the person has had good credit since short sale so it's imperative to keep your credit clean after the short sale.
Another thing to note is the time period clock doesn't start ticking until the settlement has been made. My client closed in Sept. but FHA didn't actually settle until mid November so that's when they start the clock.
This of course is all subject to change and with the ever growing number of short sales, we're hopeful these guidelines change for the better in the future. My feeling is if a person had a legitimate hardship (loss of job, had to move because of job transfer etc) and can prove it and didn't bail out just because their house was underwater, they should be given some leiniency, but obviously our system isn't seeing that this time.
I would suggest you talk to a lender anyway to see how hard your credit was hit. Some are suprisingly good but still have to wait out the time period and either keep checking back with your lender or have your lender keep you informed of any changes that come up.
The one pro....if you wait out the 3 years, you will once again be considered a first time homebuyer and may be able to qualify for programs if they have any in place at that time. Good luck
- Barry G. Shapiro, "camareal"
- Contributions:764
Hello DGE75,
The true answer to your question is 'it depends' ... What it really depends on is your credit score overall and your debt-to-income ratios. We are told that most short sale sellers can actually qualify to purchase another home 2-3 years later, if they take the steps to improve their FICO scores. The VA loan programs allow to come in with no money down -- so you'll want to byuild up your financial reserves over time to help qualify. See more info at http://www.findforeclosurehelponline.com/ .... Good luck and sorry to hear about your dilemna -- one shared by so many hard-working Americans and Veterans. Happy Veteran's Day -- thank you for serving our Country!
The true answer to your question is 'it depends' ... What it really depends on is your credit score overall and your debt-to-income ratios. We are told that most short sale sellers can actually qualify to purchase another home 2-3 years later, if they take the steps to improve their FICO scores. The VA loan programs allow to come in with no money down -- so you'll want to byuild up your financial reserves over time to help qualify. See more info at http://www.findforeclosurehelponline.com/ .... Good luck and sorry to hear about your dilemna -- one shared by so many hard-working Americans and Veterans. Happy Veteran's Day -- thank you for serving our Country!
- David Lauletta, "VC Realty Group"
- Contributions:11
Typically, it's a 2 year wait if the borrower puts 20% or more down on the next home purchase; 4 year wait if the borrower puts between 10% and 20% down; 7 year wait if the borrower puts less than 10% down. The wait time is 2 years if extenuating circumstances are documented and the borrower puts 10% or more down. It also can depend on what type of loan your are applying for e.g. FHA, Fannie Mai, Freddie Mac, VA etc. For more detailed information please follow the link to my website [link removed by moderator] nd you will find more information regarding Short-Sale Sellers.
Realtor
Certified Short Sale and Foreclosure Specialist
David Lauletta
[contact info removed by moderator]
Realtor
Certified Short Sale and Foreclosure Specialist
David Lauletta
[contact info removed by moderator]
Buying a home after short-sale
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