It depends on the circumstances and the type of loan you had and the type of loan you are applying for. I copied this from FHAâ€™s 4155:
A borrower is not eligible for a new FHA-insured mortgage if he/she pursued
a short sale agreement on his/her principal residence simply to
â€¢ take advantage of declining market conditions, and
â€¢ purchase a similar or superior property within a reasonable commuting
distance at a reduced price as compared to current market value.
Borrower Current at the time of Short Sale
A borrower is considered eligible for a new FHA-insured mortgage if, from
the date of loan application for the new mortgage, all
â€¢ mortgage payments on the prior mortgage were made within the month due
for the 12-month period preceding the short sale, and
â€¢ installment debt payments for the same time period were also made within
the month due.
Borrower in Default at the time of Short Sale
A borrower in default on his/her mortgage at the time of the short sale (or preforeclosure
sale) is not eligible for a new FHA-insured mortgage for three
years from the date of the pre-foreclosure sale.
Note: A borrower who sold his/her property under FHAâ€™s pre-foreclosure
sale program is not eligible for a new FHA-insured mortgage from the date
that FHA paid the claim associated with the pre-foreclosure sale.
Exception: A lender may make an exception to this rule for a borrower in
default on his/her mortgage at the time of the short sale if the
â€¢ default was due to circumstances beyond the borrowerâ€™s control, such as
death of primary wage earner or long-term uninsured illness, and
â€¢ a review of the credit report indicates satisfactory credit prior to the
circumstances beyond the borrowerâ€™s control that caused the default.... more
Brian, It sounds like the bank had not foreclosed on the property when you submitted your offer. If your agent submitted a "complete package" with your offer (Offer, Short Sale Addendum, pre-approval letter, proof of funds to close, copy of deposit check, FICO scores) you have a good chance of the bank postponing the foreclosure.
However, ALOT depends on the listing agent and the list price. A full price offer does not necessarily mean that the bank will approve that amount. The bank will do a BPO (Broker Price Opinion) which is a mini appraisal. Based on the value of the BPO, they will determine whether or not to accept your offer.
The listing agent MUST submit a complete package to the lender all at once. Depending on the lender, this will include a letter of explanation from the owners along with their financials, tax records, etc. The bank has to approve 2 things: 1)Do the current owners "qualify" to do a short sale (hardship) and 2)What price will be approved. Along with that, the listing agent must be in contact with the Default Department with the current lender to work on postponing the Trustee's Sale. He/She cannot assume that the Short Sale Negotiator will be in contact for him/her.
Assuming ALL THAT works in your favor, you enter escrow. Keep in mind that all lenders are different, will require different things, and have different time frames but most will not pay for termite, zone disclosures, or home warranties.
My suggestion is contact a good realtor who knows about foreclosures and who can look up what the resulting bid at the auction was...if it had been listed prior etc..if any offers came via short sale and what were they. In addition one that knows the process and who can represent you in a way that is in your best interest. On bank owned while us agents like get dual sided transcations...it is better especially in a bank owned situation to have an agent representing you and not the bank.
Let me know if I can help...... more
A lease option is always possible. There are many properties that have been in the market for a long time and they will be receptive to a lease option proposal. Many homes that are for rent might be willing to go for a lease option also. Nobody will accept a lease option without an option money deposit. If you exercise the option, the option money deposit goes towards the downpayment of the property. If you don't you usually forfeit your deposit. Also, some of the benefits of the lease option is that some of your rent money can go towards the down payment. I do not understand your question about "are there people that buy and option back?. You have to explain it better. Yes, there are many foreclosures in San Diego in many different areas. As the previous agent mentioned, you have to be careful that the Seller is a sound Seller that it is going to keep on paying his mortgage otherwise, your option money would be in jeopardy. With some many defaults and foreclosure nowadays, you never know. The Seller; in this case the person that gives you the option, has to be in good financial position and would have to prove it. The option has to be recorded so the property does not get sold behind your back.... more