I read through this and it really amazes me how so many lenders/underwriters act like lawyers.
The HUD guidelines state:
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 pre- foreclosure 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.
4155.1 4.C.2.l Short Sales
The guidelines (not rules) address defaults and current at the time of the short sale. They don't actually address mere delinquency. However, the "experts" have taken default to mean delinquency.
On top of that, the exception states clearly: default was due to circumstances beyond the borrowerâ€™s control, SUCH AS death of primary wage earner or long-term uninsured illness
Such as, generally, means an example, and not exclusivity. However, from the posts I read below, that's exactly the way it's being interpreted.
I understand lenders/underwriters/mortgage professionals being wary of people that have gone through foreclosures, but they're being ridiculous and interpreting "guidelines" like they went to law school.
Good luck with your hunt for a loan. There has to be someone out there that can see that a Guideline is a Guideline, and additional circumstances may be used to determine loan eligibility.
We have a program that allows a borrower to buy again just One Day after Foreclosure or Short Sale.
It is a "Portfolio Loan" and underwritten in house. The rates are much better than "Hard Money" which up until recently was the only option.
Let me know if you are still looking.
Did you have any lates as part of the short sale? If you didn't, you are eligible for an FHA loan immediately. Most people do have lates though, so let's assume you did, and that is the challenge. USDA does not require a wait time after a short sale. However the issue you will run into is investor overlays. Overlays are guidelines or requirements that lenders or investors put on top of the defined program requirements. Most investors have overlays unfortunately. Most of them will require 3 or 4 years post short sale. However, chase rural housing does not have overlays, so if you can find a lender who sells loans to chase rural you could be in business as long as you meet all the defined USDA requirements and have property and income that is USDA eligible. One lender I know that sells to chase rural is first capital mortgage group in Pittsburgh. Call them at (412) 942-1020 and ask for Jason livengood at ext 28. You wont run into overlays with those guys. Tell him I sent you.
VA â€“ as little as 2 years after a foreclosure, short-sale, or chapter 7 bankruptcy you could potentially be approved. This is obviously your best bet.
FHA â€“ youâ€™ll need 2 years after a chapter 7 bankruptcy, but 3 years from a short-sale or foreclosure. There is an exception if you were required to move to a completely different market, and you didnâ€™t miss any payments for the last 12 months - and were up-to-date at the time you completed the short-sale, you could buy immediately after the short-sale. (Sorry, but your situation wonâ€™t be an exception â€“ even if you have it in writing that BofA told you to miss payment to start the process.)
Fannie-Mae â€“ it will take 7 years from a foreclosure (they donâ€™t like these,) but as little as two years from a short sale. The trick is you will need to put 20% down to buy again after only two years. You need 10% down after 4 years, and in order to do maximum financing, a full 7 years needs to have elapsed. If you had a chapter 7 bankruptcy you need to wait 4 years.
USDA â€“ itâ€™s basically 3 years from a foreclosure, a short sale, or a chapter 7 bankruptcy is required.
So it sounds like you will be good to go on a VA in a little under a year. Best of luck to you, and keep up the good work. Feel free to go to my profile page and call or e-mail me directly if you have any other questions.
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If you did a short sale and didnt have any lates prior, then you dont have any wait time, you are ready to buy asap.
Cross Country Mortgage
Specializing in Illinois and California
RATED A+ WITH THE BBB
*We do Conventional loans down to a 620 score
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The U.S. Department of Housing and Urban Development (HUD) recently announced the â€œBack to Work â€“ Extenuating Circumstances program, 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 HUDâ€™s minimum eligibility requirements.
contact me please here is my personal email
Mrs Zoe Amber.
We have a portfolio "2nd Chance" loan (NOT FHA back to work) that allows you to buy again just one day after Short-Sale or Foreclosure. You can only have one on your credit and you will need a 20% down-payment and 660 mid FICO score.
This loan is available in - AZ, CA, CO, DC, FL, HI, IL, MD, MT, NV, NJ, NY, NC, OR, SC, VA, and WA . Loan amounts up to $4 million +
They look at each situation on a case by case basis. I think your credit score is already high enough to qualify. I have included her contact info below.
Shelley Griffin, Associate Property Agent
CalVet Home Loans
Loan Processing Unit
1227 O Street #222
Sacramento, CA 95814
Phone: (916) 503-8352
Fax: (916) 653-9641
It is difficult to get through by phone but very easy to communicate to her by email. Once again, I was very impressed with he awesome job that Shelley did. It was the first time that I had ever had her as a lender on one of my transactions and I highly recommend her!
Feel free to call me if you have any questions...
I have a great portfolio program designed specifically for folks who have had a foreclosure, short sale or deed in lieu. NO SEASONING IS INVOLVED. 660 credit score 20% down up to $1MM in California. I don't know of any other bank that has this product.
Our bank also has all of the traditional products as well. Feel free to give me a call if you want to talk. My number is listed in my profile along with my website and recommendation.
Late payments are not a problem.
I just closed a VA today where they had 2 short sales 26 months ago.
I can help you!
However, even though FHA has made these rule changes, many lenders will choose to NOT follow them (and are not required to do so). So in talking to different lenders, be sure to find out if they are accepting the new FHA loan guidelines.
I saw it once, and thought it was a marketing promotion, But then I saw it again two other times. I've asked my lender what he knows about this....so check again. There might be something that changed just recently. I'm checking this out. I don't know if it's fact or fiction but it sounds promising.
Foreclosure,BK, Short Sale Seasoning.pdf (file://GREGHERMAN-PC/Users/Greg%20Herman/SkyDrive/Documents/Flyers/Foreclosure,BK,%20Short%20Sale%20Seasoning.pdf)
Straight answers, no games, no guessing.
In cases where the lender approves of the new loan, the VA loan applicant who has good credit, has waited two years since the official date of the short sale, and provides the required supporting evidence could be approved for a new VA home loan.
It's important to point out that not all lenders permit these types of transactions, and some require the borrower to wait longer than the VA two year minimum. But lenders who do agree can help a qualified borrower ready to become a homeowner again--even after a short sale.
As I read some of the responses here, I suspect there's some who do not understand what the HUD guidelines are, and why they are in place. A lender, when he originates a loan, most often SELLS that loan to an investor, (whether or not the SERVICER - who you pay each month- remains the same). Most often (almost always) in this economy the investor who owns your loan is a government entity. Therefore, when a lender originates the loan, they want it to comply with what their investor requires. There is no judgement, but sound economic principles applied to help avoid the issues we had in the past.
Many of my clients who have had to wait the 2-3 years came back in the market with a mortgage rate much improved than when they left the market. So while they didn't like to wait, it actually worked in their favor. I hope you were able to move forward now. And again, we'd appreciate hearing of your success in re-entering the market after a short sale.
Visit http://www.cfsflex.com for more details.
The only time you can repurchase 1 day after is if you do not have any mortgage lates leading up to your shortsale and you were not in default. There also are repurchase restrictions per HUD regarding this as well.
Many lenders have guideline overlays that restrict what they are able to do. These are mostly banks and credit unions however smaller mortgage bankers also have additional restrictions as well. Being direct has it's advantages. I hope this helps.
They have a program called Flexible Credit Loan which seemed too good to be true, but I have heard that many got approved and now have a pending offer, even after the short sale less than two years ago. Big banks said it could not be done.
Obviously it can.
What kind of loan did you do a short sale on? Conventional? FHA? VA? This does have some bearance on going forward as government loans may have different dates and clearances.
Also what I am finding is those borrowers who went through s short sale and had a first and a second are running into issues due to the credit reporting of the short sale. After numerous hours of research I've been able to cure this where other lenders are not able to do so. The credit report triggers the DU underwriting to show your credit as a foreclosure rather than a settled account or short sale.
Generally 2 years on VA, 3 on FHA for a short sale. I work for a mortgage banker and am able to handle all of the California area. With 27 yrs of experience in lending, I'm sure I've got the answers to help you move forward.
South Pacific Financial Corp
Basically though u need to remove those lates...there are companies that can do this.
As long as you DID NOT miss 4 payments that would be harder, because once you are 120 days late..the bank files an NOD notice of default..this starts the foreclosure process and shows on MERS that basically you foreclosed even if you didn't....
so fix those lates , get them removed....THEN approach VA....
as long as your credit is in the high 6's or 7's and you are working...and current on bills now..
and have income coming in and some reserves...it is on a case by case basis and they are very
aggressive in approving new loans... hope this helps...
Sheyenne Schultz 310-429-4170 email@example.com
Im from Coatesville and completed a short sale on my town home 18 months ago. There is so much back and forth when it comes to this answer. I have been told by numerous brokers that I must wait the 3 years no matter what. Then I was told USDA could be the answer. Then I see online that there may be other options for us. What is the answer? Do you know of anyone in our area that can help?
For USDA Guaranteed loans, there is ABSOLUTELY NO DOCUMENTED 3 year waiting period after short sale. It simply doesn't exist. I have read every official USDA guaranteed loan document, and it doesn't exist. I've talked to USDA representatives who walked down the hallway and asked USDA underwriters, and they said no 3 year waiting period exists. They take it on a case by case basis.
If you are going to act like an authority, please get your facts straight so people can get GOOD information from this site.