Home Buying in 92562>Question Details

Jameskerry41, Home Buyer in San Diego, CA

I forgot to mention previously that I have never used my VA Loan; just wondering if they would require the 'sit out' on a previous short

Asked by Jameskerry41, San Diego, CA Sat Oct 1, 2011


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The Department of Veteran's Affairs does not view a short sale as a preforeclosure, lenders just need to ensure you have no derogatory credit within the last 12 months. Each lender is free to add their own "overlay" guidelines which can require a seasoning period after a short sale, but that is not a VA requirement, it is a lender requirement. Many lenders follow VA's guidelines on it anyway, so it's not too difficult to find a lender who won't turn a short sale into a big deal if you are applying for VA financing.

If the short sale was on a VA mortgage, VA will subtract the amount of the claim they paid from your available entitlement. You can determine this by ordering an updated VA Certificate of Eligibility. Once you get that, subtract the amount of the entitlement that was charged to the claim from $134,375 (this is the total maximum entitlement for Veterans buying in San Diego County). After you get that total, take the remainder times 4 and it will give you your maximum new VA loan amount for 100% financing.

For example, if the VA paid a $30,000 claim (that shows up on the certificate of eligibility): $134,375 minus $30,000 = $104,375 times 4 = $417,500 maximum new VA loan for 100% financing in San Diego County.
1 vote Thank Flag Link Sat Oct 1, 2011
Hi James Kerry,

I would have to echo exactly what Shane mentioned. In fact, I just game him a big thumbs up answer.

I guess the big question is whether you had any late pays in the 12 months leading up to the short sale and the purpose for the short sale.

If you didn't have any late pays but short sold just to go buy a similar home down the street for half the price of your former loan amount, that could be an issue. That is considered taking advantage of the market.

You will find many lenders overlaying (adding) their own more restrictive guidelines.

That is why I work for a mortgage company that is both a direct lender and a licensed mortgage broker. Most direct lenders cannot broker out, which gives them very little flexibility to meet the needs of buyers who have more complicated qualifying scenarios.

If my bank can't approve a particular loan for some reason, I can find a 'niche' who may have less restrictive overlay guidelines.
Web Reference: http://homeloanartist.com
0 votes Thank Flag Link Sat Oct 1, 2011
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