The single problem here is that lender guidelines base the 3 year period waiting from the recording date of transfer of ownership. There is no way around this that I have heard of ...Lenders?
The fact that they did not take possession sooner, and allowed you too have legal responsibility , was mostly likely planned and intentional on their part for reasons most consumers aren't aware.
There are certain cases where a short sale is not the best option, clearly yours was one of them.
Solutions- There are certain new home builders that offer interim financing for folks in your position.
Also, you can subscribe to "seller carry", "lease option" or other similar type listings.
You can also locate a short seller who is not terribly upside down and offer to assume arrears and continue making payments until such time you can obtain your own finance.
You may be able to locate a portfolio lender who will work with you.
I was in the process of begining the short sale process in 2008. I was then advised that lenders were begining to go after people who did short sales and bankruptcy would prevent that from hapening. Then of course this happens.
I honestly feel that BofA is holding my life hostage in a way. Everyone who has gone through this process has had a fresh start rather quickly while I have to wait 7 years? Since giving the home back in 2008 I have moved my family 3 times based on landlords selling the home we live in or raising rent. I have young children who have now been in three different schools. All I want is a normal, stable life. But I can't do that because of this long delayed foreclosure.
I dont believe the wait is on the BK , it would be on the foreclosure.
In a general scenario,there is a 3 year waiting period for an FHA insured loan from recording date of foreclosure and discharge date of BK ( Im sure some lenders will clarify this point)
Also , you are not totally "screwed" , but will most likely pay a higher sales price and higher interest rate in 2015.
Had you of completed a short sale, this most likely would have been a non-issue as a new buyer would have taken legal possession and recorded in 2008/2009. This is also the preferred way to dispose of an asset and most likely reduces the banks losses overall.
It is easy to print out a pre-approval letter and get everyone scurrying about showing homes and writing offers.
I have encountered something similar with a great buyer and discovered that if the lender would have taken the time ENSURE the client was "good to go" , it would have saved them significant money and avoided a great deal of stress and disappointment.
Please post your answer so other buyers can avoid this ...