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Does anyone know the timeline for the Economic Related Event and the short sale date requirements fo

Income loss of 32% from 08 to 09, then a gradual increase for following years.  Put on market for short sale in 11 but the process took one full year to close in June of 12.  Our income was back up to the 08 level by then.  Wondering if it is worth trying or if there are specific timelines.
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October 17 2013 - US
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Hi Tammy,

While loans backed by the gov't (either sold on secondary market, FHA, or VA) don't have much flexibility, portfolio lenders do. There is a program that would allow you to buy again right away. It's a 20% down-payment which can be quite a bit for someone recovering from a Short Sale or Foreclosure but you can use 401k funds to contribute. Let me know if you would like more info..

Good Luck!
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January 23
@Lisa, 

Totally agree with your comments for regular loans.  However, FHA Mortgagee Letters 2013-23 and 2013-24 have given much more flexibility on credit qualification for borrowers who have had issues outside of their control....and that is what this question relates too.

Every day, I am being contacted by a consumer trying to find out about the new Back to Work program and many of them have been told (by multiple lenders) the very same guides you have stated.

I know very few lenders are doing the full FHA Back to Work Program (much like very few do the full HARP 2.0 without overlays, 203K loans or manufactured loans); but it is important that consumers know the options in the marketplace...not simply limited to the specific lenders product inventory.

All my best,

Deborah
NMLS  #279125
WJ Bradley

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October 17 2013
Short Sale is very similar to Foreclosure from the lenders standpoint.  Exceptions are "the Back to Work" program. 

First we start by knowing what you past loan type was (FHA,VA, CONVENTIONAL/FANNIE MAE OR FREDDIE MAC), as if you are trying to get the same type of loan, then the timeframe may be extended.

You must have reestablished good credit and have no late payments in the last 12 months.  The higher your creedit score the better.

For the new loan:

VA= 2 years from short sale
FHA= 3 years from short sale
Conventional= 4 years from short sale.

Those are the basic guidelines, however note at one time short sales would had to wait 7 years so it is getting better, and the timeframes are decreasing.
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October 17 2013
As a direct lender, we are doing the Back to Work program without any additional overlays and, per your scenario, we would not be able to the Back to Work program for you.  You MAY qualify for extenuating circumstance underwriting guides that would allow for the same type of time frame reductions; however.

The Back to Work program is positioned for borrowers who have a single event (loss of job, medical issue/death or mandated reduction/furlough from employment, for instance) that was out of their control.  And, the impact needs to be confined to a specific period of time.  Six months is a base; though there is some flexibility.

In your case, the income situation was ongoing; therefore, it does not fit the Back to Work guidelines.  I am finding that many borrowers contacting me for this program are qualifying for our approach to extenuating circumstance.

All my best,

Deborah
NMLS #279125
WJ Bradley

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October 17 2013
From what I have seen, lenders will ask for proof of the reduction in income or proof of the job loss that took place before the Short Sale or foreclosure, they will want to see good credit and on time payments prior to the event, i have not seen a guideline on the time frame from when the event takes place to when the loss happens. But I would be happy to take your information to one of our underwriters to see if we can get you a pre-approval if you'd like?   [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
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October 17 2013
 
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