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Profile picture for Joep1326

Can someone get a mortgage one year after short-sale with a co-signer with no short sale?

I did a short sale earlier this year.  I have a good six-figure income, 20-30% down and a credit score over 700.  However, I did a short-sale on my primary residence earlier this year.  My wife was not on the note and thus has no short-sale on here credit report which is in the 780's.  However, she is a stay-at-home mom and does not have her own income.  We file a joint tax return but the majority of the income is my w-2 income.
Can she get a mortgage, can I get a mortgage, or can we get one together early next year, one after the short-sale?  Knowing that the typical waiting period is 2 plus years.
  • September 17 2012 - US
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Answers (22)

Profile picture for ukdrahan
i am in new mexico and had a short sale in az. 14 months ago.   just purchased a home  valued at $300,000 and owe $160,000 with a loan from a relative at 7.5%.  currently looking for a lower interest loan.  credit score over 700 and was over 800 before short sale.  all other credit has been excellent for over 40 years,  am retired with income of $75,000 annually.  excellent payment history in all accounts.   is it possible to receive a better interest note 
  • January 02
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Having a co-signer won't make the short-sale disappear to a creditor. However, there is good news. We have a portfolio "2nd Chance" loan that would allow you to buy again right away. There's no minimum waiting period as long as you've only had one Short-Sale (or foreclosure). The reqirements are pretty simple and it sounds like you qualify. You would need at least 20% down-payment (+ 6 months reserves) and a 660 minimum mid FICO (although there are exceptions to 620) . This loan is available in AZ, CA, CO, DC, FL, HI, IL, MD, MT, NV, NJ, NY, NC, OR, SC, VA, and WA . You can look at my profile for some recent reviews from people who I've done these loans for.

  • June 11 2014
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Hi,

[self promotion deleted by Zillow moderator. Please see our good Neighbor Policy for posting guidelines]
  • January 08 2014
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Profile picture for user96874941
I am 1 year out of a medically necessary short sale and was told by a national lender just yesterday that I would have to come up with greater than 20% down for anyone to consider me for a new loan.

Not sure of anyone who got a short sale approved without being late, why on earth would the lender approve that? Even with my daughter's medical condition I fought the lender for almost 6 months before they would approve.

Now I live in Florida and will prob have to wait another year to buy with 20% down.
  • January 07 2014
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Yes people can qualify for a new mortgage just one year after they short sold property. I've actually helped a number of clients successfully buy again after short selling property. In one case we actually helped them purchase a new home while they where still in escrow on their short sale.

When qualifying for that new loan it is always good to know the circumstances behind the short sale. Having a strong down payment is good but not always required. If you were behind on your payments at the time of short sale then you would want to be sure your credit has been strong since. And then of course the regular income and asset requirements of most loans would apply.

Please feel free to contact me if you would like to see if you qualify or just need answers.
  • November 20 2013
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Profile picture for spalione

The new back to work program is so new that most lenders are not honoring it as of yet.  Even HUD does not know what counseling program to sign you up for to meet one of the reuirements of this new 'guideline'.  We are at 2 1/2 years from our short sale which was due to loss of income and we have been turned down twice for this new program. 

  • September 16 2013
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If the short sale was because of a true financial hardship with a drop of thity percent in pay it may  be possible within a year's time!

For more information please contact me!

Kathleen Doll
www.Mortgagedoll.com
  • September 16 2013
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Yes there is a new program to help out people in your situation.
Back to Work Program from HUD, aimed to help people who have lost their home through foreclosure, short sale or bankruptcy. HUD has reduced the previously required minimum of 36 months to 12 months before they may be able to finance another home, given that they meet HUD's minimum eligibility requirements.

 

  • September 01 2013
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spalione - After 3 years you can get an FHA mortgage. After two years, the only option is conventional with 10% down and an extenuating circumstance. For the clients I've gotten approved, the best have a timeline written out explaining what happened and third party info to support it. Showing that you were underwater payment wise works but, again it has to be supported with income docs and proof of expenses. 

  • March 02 2013
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Profile picture for spalione
I am 2 years past my short sale.  I short sold because I had to, not because I wanted to take advantage of the market.  Though I make less than I used to, I still have a 6 figure income which is why the IRS is killing me slowly every year.  I need to buy something to stay afloat, but I can't get approved.  I have a small down payment 5-8% - I don't understand how you can have such a large down payment within a year of your short sale unless you did not have to short sell, but are just taking advantage of the market.  It's people like you that are making this situation more difficult and stressful for the honest hardworking people like me.  By the way, my credit score is 702 and I was late on my mortgage payments (5 months or so) because BofA said I had to be while trying to get a loan modification (which I would have preferred to selling). 
  • March 02 2013
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Yes, now let's clarify.

1.) Purchase Using an FHA Loan Immediately After A Short Sale:

a.) Someone who managed to keep their mortgage payments current     from the 12 months leading up to the closing. In addition to their          installment debt i.e. auto loans, student loans etc. and if not buying a home equal to or superior to their previous home in order to take advantage of a downward market.

b.) Someone who wasrequired to transfer or relocate in order to       continue working for their same company. Must have been at least 100 miles or more away from the previously owned property in order to be considered an unreasonable commute therefore it can considered an "Extenuating Circumstance". In this case, late payment can be considered exceptable if lender required homeowner to late in order to qualify for the hardship. I have close several loans under these circumstances.

2.) Purchase Using An USDA RDL One Year After A Short Sale:

a.) If you meet in the income qualifications and you buy a home located in an eligible area, you CAN BUY a home as soon as 1 year after a short sale EVEN IF YOU WERE LATE on your mortgage.





  • February 22 2013
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It's possible to get FHA financing if you weren't late on the mortgage payments. If you were late you will have to wait at least 2 years for conventinoal with 20% down and 3 for FHA with 3.5% down. If you were late and had several late payments you may have trouble getting a conventional approval due to the fact that your previous lender most likely had you in pre foreclosure status. Where you late on the mortgage payments during the short sale process?
  • January 17 2013
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I'm not saying there aren't lenders that do this but, let me get this straight. 

Jumbo loan with 40-45% down means the house is somewhere between $800K and a million, right? Last year the borrower was so broke they had to short sale their home, and this year they have enough money to do that type of transaction?If lenders thought B paper was risky, this is no better. 

I get extenuating circumstances. They happen in people's lives but, unless I'm missing something that transaction would most probably come from someone taking advantage of the system.
  • November 12 2012
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Profile picture for RoopSGill
You can get a mortgage even just one year after a short sale under your own name thru a portfolio lender with the following conditions:

40%-45% down payment
Liquid funds to cover 6 months of mortgage payments
Enough income to cover your mortgage (up to 30% debt to income ratio)
Impound accounts (to cover home insurance and property taxes)


If you are looking for a portfolio lender, I can refer you to one.

-RG
  • November 11 2012
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@Brian - I am employed by Citi and know of no such formula. They go by the same gov't guidelines everyone else does. Possibly for their portfolio Jumbos they may have such guidelines but, I doubt anyone is going from a shortsale to such an expensive home. 

@Jeop - People tell me they have done short sales without being delinquent on the mortgage. The only ones I've seen, the lender refused to negotiate a short sale unless they were delinquent. That said, and assuming you were never delinquent - What were the circumstances behind the sale? If you did it just to get out of being under water, then I would say the chances of getting financing right now to be nil. If there are extenuating circumstances that were beyond your control then you may have a shot. 
  • November 09 2012
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I agree with Mark on the FHA guidelines.  No waiting period if the mortgage and all other installment debt was paid as agreed leading up to the short-sale.
  • November 09 2012
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There is no universal answer I know of that answers your question. Lenders are just in the last 6 months or so starting to see more applicants for loans with short sales on their credit reports. There is no law or rule that they have to follow - they can deal with this the way they want to.

I would talk to some loan brokers, explain your situation, and see what they can do. I believe you will find that some will say no, some will say yes, and some will say yes but....

Our in-office lender, who works for CITI, told us a few months ago that there is a formula at CITI, depending on how long ago the short sale closed, that determines how much downpayment over 20% the applicant would have to put down. Whether this formula would apply in your case with a cosigner is a question the lender would have to answer for you.
  • November 08 2012
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I work for a major national depository bank. I just had a loan approved with no issues. Conventional loan, 10% down, borrowers were two years removed from short sale. They were delinquent on their previous loan as the prior lender would not approve the short sale otherwise. 

Rate was no different for them than any other applicant with their credit score and down payment. We're even giving them $500 off of closing costs because they opened an account with us. 
  • November 08 2012
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Here are the guidelines:

From FHA guideline-

Borrowers are considered eligible for a new FHA-insured mortgage if, from the date of loan application for the new mortgage

  • All mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale, and
  • All installment debt payments for the same time period were also made within the month due.

Lenders are not allowed to approve  a new home purchase  if…

from the FHA guideline-

-Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.-

Another caveat is that if you are simply trying to take advantage of the market a new FHA insured mortgage will not be approved-

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to
• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.

  • September 18 2012
  • 1Yes

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Good Afternoon,

It is possible to buy again after a short sale without waiting the standard time frame of 3 years on FHA financing if you were able to sell without going delinquent.

If you were able to sell and still not go late on your payment feel free to look me up.

Thanks!
  • September 17 2012
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Profile picture for 203K Alternative
There are lenders who have programs with not waiting period for short sales or foreclosure.  They require 20-30% down, rates range from 6.5%-8.5%.  Min FICO is 640.  What state are you in?
  • September 17 2012
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I have been told by local lenders in St Louis, you have to wait 3 years after a shortsale before you can qualify for a loan. I hope this helps, but I would ask several lenders in your area and start the rebuilding of your credit so you can buy your next home. Good luck!
  • September 17 2012
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