Home Buying in Lomita>Question Details

Acel Johnston, Renter in Rancho Cucamonga, CA

Can we trust our lender (GMAC) when they tell us we will be able to purchase a home in 2 years after a deed in Lieu?u

Asked by Acel Johnston, Rancho Cucamonga, CA Mon Apr 9, 2012

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13
No.

Of course not.

GMAC has no idea what the underwriting guidelines will be in 2 years. Nor does GMAC have any idea what your income or credit score will be. All they're telling you is that, using today's guidelines, assuming your income and credit score are satisfactory, then a deed in lieu will not prevent you from purchasing in 2 years.

That's a big, big difference.

If you don't believe me, ask GMAC to provide you a letter saying that that you'll be able to purchase a home 2 years after a deed in lieu. Yeah, right!

Hope that helps.
2 votes Thank Flag Link Mon Apr 9, 2012
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
I agree with my colleagues and their statement below. The representative that you spoke to at GMAC is not giving you correct information. the wait time is 3 years unless you use a VA loan which will be 2 years. That is assuming that your credit score has recovered and your income is stable etc. There are many possible variables that the GMAC rep is not considering.

Best of luck,

Alex Montelongo/Broker
Coldwell Banker Star Realty
562-810-7387 Cel
BRE Lic#01456982
0 votes Thank Flag Link Wed Apr 22, 2015
Particularly with GMAC's track record; you can count on GMAC doing what is in their best interests:

Understand two things;
There are a lot of Lenders out there, and, if they need customers, they will bend their own rules to accomodate them.
0 votes Thank Flag Link Tue Apr 30, 2013
I love Don's answer - so many variables in today's market. We can only expect more changes in the future...
0 votes Thank Flag Link Tue Apr 30, 2013
Don is right , current guidelines can and may change. Wait and see ... 3 years seasoning right now.

Good Luck,

Soila Thompson
0 votes Thank Flag Link Fri Oct 12, 2012
I just had a client try to qualify in 2 years...they were told they need at least one more year. I agree with most of the replies and I think it is closer to 3. The big boom of sellers that chose to "cooperate" with the banks and do Short Sales and DIL's are just hitting the 2/3 year mark. It will be interesting to see how many can actually qualify at that point.
Stephanie Hart
Broker-Associate
Forecast Realty, Inc.
310-918-6856
CA DRE 01338444
http://www.hartssellsouthbay.com
0 votes Thank Flag Link Fri Sep 7, 2012
Fannie Mae only requires two years under extenuating circumstances, but not all lenders follow this Fannie Mae guideline. Some push it back to three years. I would ask upfront.

Hope this helps!
0 votes Thank Flag Link Tue Apr 10, 2012
Acel,

Before you worry too much about guidelines, lenders, shadow inventory, short sales, etc., take a close look at YOUR financial situation and come up with a plan that will permit you to be financially sound enough to buy again in just 24 months. Unless you can do that, after letting go of the current home, you don't need to worry about GMAC or anyone else's advice.

Determine how you get your financial house in order first. Make it bulletproof and then take the steps to make it happen. Even if it was an extenuating circumstance, the lesson to be learned is how to build a larger buffer in the future. You can do it.

If you have questions, let me know any time.

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes Thank Flag Link Mon Apr 9, 2012
Acel,

Just one thing to note...you can't just 'do' a short sale - it has to be approved by the lender and they may still require you to pay the difference in the amount owed versus the amount in proceeds from the sale of the property.
0 votes Thank Flag Link Mon Apr 9, 2012
Don't do a deed in lieu! Do a short sale! It's better for your credit & for the other reasons below.


Shoot me an email directly if you'd like to talk to me some more. I don't look back on this same Trulia thread for answers posted after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtors -
0 votes Thank Flag Link Mon Apr 9, 2012
Acel:

The link I provided below is broken, please use: http://tinyurl.com/6uujyco


Michael has a good point about the fact underwriting guidelines could always change. Since April 2009 there have been 22 revisions; however, the 2-year waiting period remained. Given we are still only through about 30-40% of the Shadow Inventory I shy towards the belief they will likely keep the status quo until clearer economic skies appear.

Michael also has a good point about the Short Sale and the potential benefits relative to a deed-in-lieu AND as Michael alludes talking to a CPA and/or RE Attorney is a good conservative move to make sure you are not self-inflicting damage.

-Steve
0 votes Thank Flag Link Mon Apr 9, 2012
That may be their guidelines today. But guidelines change all the time. Ask them to put it in writing.
A short sale may have more favorable guidelines and protection.
If in doubt, speak to a real estate attorney.
0 votes Thank Flag Link Mon Apr 9, 2012
Acel:

As Condoleezza Rice once said; "Trust, but verify."

In fact, if you have or had extenuating circumstances that contributed or will contribute to the Deed-in-lieu (or a Short Sale) Fannie Mae guide lines state that you may repurchase a home after two years.

See: http://=www.trulia.com%2Fvoices%2FHome_Buying%2FCan_we_trust_our_le… target="_blank" rel="nofollow">http://www.trulia.com/voices/Home_Buying/Can_we_trust_our_le…
Page 451

For a definition of Extenuating Circumstances see page 453.

Additionally, FHA financing normally requires THREE years from the short sale; HOWEVER, IF 1) the mortgage payments were made on time within the 12 months prior to the short sale, and 2) you aren't looking to purchasing a similar or larger home in the same area as short sale you can actually buy the very NEXT DAY after escrow closes on your Short Sale.

-Steve
0 votes Thank Flag Link Mon Apr 9, 2012
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