Home Buying in 30013>Question Details

Peachez4dayz, Home Buyer in Conyers, GA

Buying a house after short sale

Asked by Peachez4dayz, Conyers, GA Fri Jan 11, 2013

I sold my home in a short sale in 2011 and my credit rating took a dive due to all the missed payments. I was homeless for awhile. Now I'm thinking about filing bankruptcy and eventually buying a foreclosure in a couple of years. How long after a short sale and/or chapter 7 BK can I be considered for a FHA mortgage? Thanks.

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BEST ANSWER
Dear Peachez:

On a Chapter 7 BK, you will have to wait 2 years from the discharge date. The Short sale with missed payments and depending on how the bank/lender is reporting it on your credit, it would be safe to say worst case 3 years. That is for a FHA mortgage. In the 2-3 years, work on getting your credit score back up to the 640 and above range for your future home purchase.

Thank you,

Lynel Adams
Sr Mortgage Loan Officer
Silverton Mortgage
NMLS 359696
770-318-6740
2 votes Thank Flag Link Sat Jan 12, 2013
Thumbs up for Rodney as well, Peachez4dayz. No one on Trulia explains it as often or as thoroughly as he does. Again, Good luck!

Michael Hammond
SellsRealty@gmail.com
404-538-5499
2 votes Thank Flag Link Sat Jan 12, 2013
FHA is generally the most lenient for borrowers with a previous short sale. In 2010, HUD issued guidance to all lenders regarding borrower eligibility for FHA loans when:
• A previously owned property was sold for less than what was owed (short sale), or
• There is a principal write down of indebtedness that cannot be re-financed into a new mortgage (short pay off).

Short Sales
As outlined below, borrowers are not eligible for a new FHA loan if
• They pursued a short sale on their 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.

Borrowers will be eligible for a new FHA loan on a short sale, if:
• The borrowers were current on the mortgage and other installment debts at the time of the short sale, and
• The proceeds of the short sale serve as payment in full.

Borrowers who were in default at the time of the previous short sale will not be eligible for a new FHA loan for 3 years (based on the date of the pre-foreclosure sale).

Should the short sale have been due to an extenuating circumstance such as death or serious illness of a primary wage earner or job relocation requirement, an FHA in less than 36 months might be possible. A divorce would not be considering an extenuating circumstance.

With a Conventional (Fannie Mae/Freddie Mac) mortgage, at least 24 months must have passed since date of the short sale. The minimum down payment will be at least 20%. After 4 years have passed, the minimum down payment is 10%.

For a VA mortgage, at least 12 months must have passed since the completion of a short sale.

Regardless of the above, if the mortgage that the short sale was completed on was an FHA, USDA, or VA loan, then waiting period for a new FHA, USDA, or VA mortgage will be at least 36 months. This is due to the fact that you cannot get a government backed loan when a claim has been paid in the last 36 months on another federally insured loan (including student loans).

For a Bankruptcy, FHA mortgages are the least restrictive for a previous bankruptcy. HUD requires that a minimum of 24 months must have elapsed from the DISCHARGE date of a Chapter 7 Bankruptcy before a borrower can be eligible for an FHA mortgage.

For a Chapter 13 Bankruptcy, then you must have made at least 12 on time payments. Additionally, you must also have permission to purchase from the Bankruptcy Court.

In the time since the Bankruptcy, there should be no new derogatory items such as late payments, collection accounts, liens, judgments, etc. Having late payments after a Bankruptcy is often viewed as a disregard for the importance of credit. It also reflects that you are still having financial struggles.

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. Once it is tine, to get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
2 votes Thank Flag Link Sat Jan 12, 2013
Thanks much, Rodney, for all the helpful information!
Flag Tue Jan 15, 2013
If you do both a bk and a foreclosure it will be at least 3 years. Conventional mortgages will even be longer
1 vote Thank Flag Link Sat Mar 2, 2013
I agree with what Lynne said, with shortsale 2-3 years based on your credit score.
1 vote Thank Flag Link Sat Jan 12, 2013
Thumbs up for Lynel, Peachez4dayz, even as new mortgage rules have already been passed this year. Based on previous dealings in the field, total agreement with her that in applying for an FHA loan, there are a fixed number of days that must be passed before a Clear to Close can be issued, regardless of your credit rebuilding plans or accomplishments. Find a good Mortgage Lender, be candid with him/her, then do what they tell you to do in order to get your next approval. Also, you might consider asking what the Caviers Report shows in regards to your discharge date(s). Please call, text or email if we can provide further assistance. Good Luck!

Michael Hammond
SellsRealty@gmail.com
404-538-5499

http://www.georgiamls.com/agentsite/index.cfm?SiteID=HAMMONDJOHNM

http://www.chapmanhallprofessionals.com

http://www.SellsRealty.org

http://www.city-data.com/

http://www.greatschools.org/
1 vote Thank Flag Link Sat Jan 12, 2013
We provide mortgage financing 12 months after a Bankruptcy with 20% down for homes in Georgia. We do not have a minimum credit score, but certain restrictions do apply. Not everyone will qualify. Please call me for the details.
Jesse Kight | Mortgage Sales Manager | NMLS #75780
2380 Old Milton Pkwy, Alpharetta, GA 30009 | C: 404 202-0564 |F: 404 601-0758
State Bank and Trust Company | NMLS #441508
http://www.statebt.com | Absolutely.SM
0 votes Thank Flag Link Wed Apr 15, 2015
We provide mortgage financing 6 months after a short sale or foreclosure with 20% down for homes in Georgia. We do not have a minimum credit score, but certain restrictions do apply. Not everyone will qualify. Please call me for the details.

Jesse Kight | Mortgage Sales Manager | NMLS #75780
2380 Old Milton Pkwy, Alpharetta, GA 30009 | C: 404 202-0564 |F: 404 601-0758
State Bank and Trust Company | NMLS #441508
http://www.statebt.com | Absolutely.SM
0 votes Thank Flag Link Wed Apr 15, 2015
FHA mortgages are the least restrictive for a previous bankruptcy. HUD requires that a minimum of 24 months must have elapsed from the DISCHARGE date of a Chapter 7 Bankruptcy before a borrower can be eligible for an FHA mortgage.

For a Chapter 13 Bankruptcy, then you must have made at least 12 on time payments. Additionally, you must also have permission to purchase from the Bankruptcy Court.

In the time since the Bankruptcy, there should be no new derogatory items such as late payments, collection accounts, liens, judgments, etc. Having late payments after a Bankruptcy is often viewed as a disregard for the importance of credit. It also reflects that you are still having financial struggles.

If a mortgage was included in the Bankruptcy, HUD requires that you must wait at least 36 months from the foreclosure date to be eligible for an FHA mortgage. Sometimes, the foreclosure happens well after the Discharge Date of the Bankruptcy. If the mortgage was not re-affirmed, there is not much that can be done until the property get foreclosed on. If you have re-affirmed the mortgage, then we just have to document an on time payment history for the account.

Also, if the original mortgage was a government backed loan (i.e. FHA, VA, USDA), you must wait at least 36 months from the date that HUD paid the claim on the defaulted mortgage. This can sometimes be months after the original Foreclosure Date Until the 36 months on the claim has passed, you will not have a clean CAVIRS report which is required for an FHA mortgage.

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. Once you are ready to get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com to get started.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203(k) Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Sat May 17, 2014
You can buy again right away with our "2nd Chance" portfolio loan. There's no waiting period after Short-Sale or Foreclosure as long as you've only had one on your record. You have plenty of downpayment, we only require 20% and a 660 minimum mid FICO.

This loan is available from $50k-4 million and in AZ, CA, CO, DC, FL, HI, IL, MD, MT, NV, NJ, NY, NC, OR, SC, VA, and WA

http://cbosse.banchomeloans.com/2014/02/18/buy-home-after-sh…
0 votes Thank Flag Link Thu May 15, 2014
Hello... That depends on which state you are looking to buy. We have an exclusive portfolio program (meaning it's not gov't backed and only available through our bank) that allows you to buy again one day after Short-Sale or Foreclosure. It's available in AZ, CA, CO, DC, FL, HI, IL, MD, MT, NV, NJ, NY, NC, OR, SC, VA, and WA. The requirements are a 20% downpayment and a 660 mid FICO score. You can find out more info from the link below -
0 votes Thank Flag Link Fri Jan 24, 2014
You may qualify to purchase a home just 1 day after a short sale. Nowadays, many lenders have flexible loan programs that you can take advantage of.


Check if you qualify for mortgage. Try http http://:www.whywaitbuytoday.com
0 votes Thank Flag Link Sun Aug 11, 2013
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I a very happy to be able to purchase again.
0 votes Thank Flag Link Mon May 6, 2013
I had a foreclosure 2 years ago and I just got approved to buy a new home. According to their site http://www.cfsflex.com I can qualify one day after a foreclosure.

It seemed too good to be true, but I got approved and now have a pending offer, even after my short sale less than two years ago. Big banks said it could not be done.

Obviously it can.
0 votes Thank Flag Link Wed Mar 13, 2013
I checked into this and it is only available for the states AZ and CA. I wish it was the case for GA. My credit score and income are on point but the Short Sale wait is killing me. Consider yourself blessed if you were avable to get past the 2 to 3 years waiting period.
Flag Thu Apr 4, 2013
Glad things worked out for you! Thanks for the feedback.
Flag Wed Mar 20, 2013
I had a foreclosure 2 years ago and I just got approved to buy a new home. According to their site http://www.cfsflex.com I can qualify one day after a foreclosure.

It seemed too good to be true, but I got approved and now have a pending offer, even after my short sale less than two years ago. Big banks said it could not be done.

Obviously it can.
0 votes Thank Flag Link Wed Mar 13, 2013
Hi Peachez4dayz,

Sounds like you've gotten yourself in quite a mess. Your question does not address what your situation is now. Are you working? Do you have a steady income? If you're contemplating Bankruptcy, are there other problems beside Short Saleing your home?

If you have income and the money for a down payment or can get it, you might consider talking to a Private Lender. The concentrate on your present income and your ability to repay the loan. They will also consider the Appraised Value of the property you want to buy and the selling price. They will require a larger down payment that FHA or other Conventional Mortgage Companies and their interest rates will be higher because of the risk of lending to "non-conforming" borrowers. Your Credit Score and your Short Sale will not prevent them from giving you a mortgage if you can explain the details of how you got into this mess.

It's going to take you 2 to 3 years to get rid of the effects of the Short Sale and probably longer to get you Credit Score back up to qualify for Conventional Funding. If the Short Sale is your biggest problem, I would think twice about filing for Bankruptcy, at least not Chapter 7. You may be able to get Private Money with a Chapter 13, so long as your other debts are not enormous.

I can give you the contact info for a Private Lender who is licensed in the State of Georgia to make Home Loans. I have worked with this Company several times and they are very creative in finding ways to get people financed It can't hurt to contact them to see if they can help. At the very least, they can advise you of what you need to do to get financed.

Their contact information is:

The Westmoore Group, LLC
http://www.westmooregroup.com
Ph: (646) 801-6190
Fx: (646) 619-4291
The Westmoore Group, LLC is a licensed lender in the State of Georgia and operates under the license #30544.

Good Luck!
0 votes Thank Flag Link Mon Jan 21, 2013
Well, it depends on how low your score is now and how diligent you are in rebuilding your credit rating.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Sat Jan 12, 2013
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