Home Buying in Denver>Question Details

Timon S. Coy, Other/Just Looking in

I had to short sale my home in WA state do to my job transferring me to Colorado. The sale just closed, can I buy a home soon?

Asked by Timon S. Coy, Mon Feb 4, 2013

Help the community by answering this question:


Note to Consumer:

1.) When looking for or researching a Lender, consumers can go to the NMLS Consumer Access website to look up anyone or any company. As Joetta stated, after looking at MY website, it didn't appear that my company works in CO. Mty company is licensed in multiple states which can be seen by using this consumer tool: http://www.nmlsconsumeraccess.org/

2.) Clarification of previous answer. As in any profession, there are good and there are bad. I have seen SCORES of unscrupulous Realtors in my 20+ years in the business doing things that make me shake my head but that doesn't make all Realtors bad. My comment was designed to demonstrate the simple fact that, just because you carry a license, that alone does NOT make you good at what you do.

Case in point, I recently Pre-Qualified a client, and yet that client decided to go with the Builder's in house lender. 90 days later I get a call from that client stating she had been denied not only by the Builder's lender, but by two other lenders and she only had two weeks to close or have her escrow closed out. She literally cried on the phone and asked me why would I pre-qualifying her if the loan couldn't be done in the first place? The answer to her was simple. I could have and I will close your loan!

That woman and her current husband had two short sales, one previous foreclosure, and one mortgage being currently being reporting 90 days late on her credit report. That woman had been divorced and the home was given to her ex-husband by order of the court. Now to the average lender, this was NOT a doable deal. But to right lender working for right company, this was a closeable loan. And yes I closed it. Knowledge, experience, tenacity and having a calling to help people who can find no help is what separates the good from the not-so-good.
2 votes Thank Flag Link Tue Feb 5, 2013
From A Lender:

Buying a home after Short Sale:

FHA underwriting guidelines, that are always changing, currently state that a home owner can receive financing 3 years after they sold their home in a short sale. Although, that time penalty CAN be waived in certain cases, including long term job loss/loss of income.

Another possibility, slim as it may be, there is NO time limit on another purchase using FHA if the short sale home owner was current on payments for the previous 12 months before the date of short sale closing. That’s a homeowner who stays current on payments during a short sale.

Current on payments for a short sale? A lender stated they've seen one or two short sales get approved while an owner is current on payments, but it’s very rare. After all, the banks are looking for a hardship, and they’ve made it almost impossible to have a positive short sale outcome unless the hardship is financial. Most banks even require you to be 90 days or more late before they will even look at you for a short sale.

So 3 years or sooner for FHA financing.
1 vote Thank Flag Link Tue Feb 5, 2013
I disagree Jim. I've had an experience with a major lender which basically said my client couldn't be on a mortgage because of a short sale. Another broker came through and got them the mortgage. I agree with George, not all mortgage brokers know all the details on different programs, but the good ones will search out those details to see if a program can work.

1 vote Thank Flag Link Tue Feb 5, 2013
Tim, I've seen some answers that are absolutely wrong. George had mentioned this in his answer and I believe he is correct. Being that you sold your home to relocate for job purposes you fall into a different category. Here is the key question: Did you pay the mortgage on youy home in WA up until the time of the closing? If you did, you may be in luck. If you didn't, you will have a hard time unless you wait. I closed a sale a few months ago where one of the buyers had a short sale a year earlier. She did pay her loan up until the closing and did relocate from MN to NY for employment. Several large mortgage brokers said it couldn't be done. There was one in my area (Matt Jablonski of Mortgage Master) who knew the regs and got the load approved. It seems George knows the regs and can guide you to the right person.

Good luck!

Don Mituzas
Licensed Associate Broker
2008 Realtor of the Year
Douglas Elliman Real Estate

1 vote Thank Flag Link Tue Feb 5, 2013
Depending on who you ask, you will most likely will get different answers. In my case I seem to be one of the few lenders out there who actually knows the Regs or works for a company with some common sense. I do loans like this all day long. Your scenario falls within the extenuating circumstance column with FHA and more importantly my company. I have done several relocation purchases, many recently. Although I am not licensed in CO my company is. I can refer you to someone in our company who is. Please take a look at my Recommendations, you will see several comments from people just like you. Or read any one of my blogs concerning Short Sales and you will find customers I have recently closed with similar situations as yours. Don't be dissuaded by a couple of incorrect answers, you can apply for home loan and get approved, you just need to find the right Loan Officer who works for the right Lender.

Best of Luck!
1 vote Thank Flag Link Mon Feb 4, 2013
Good answer. I see so many answers in this forum that are incorrect and possibly keep someone from buying a home when in reality they might be able to qualify. It shows that just because someone has a "pro" below their name or has a VIP badge it doesn't mean they know what they are talking about.
Flag Tue Feb 5, 2013
You don't have to wait.....

We have a portfolio "2nd Chance" loan 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
0 votes Thank Flag Link Thu May 22, 2014
I depends on whether you were current or past due at the time of close. Lenders consider these differently than traditional short sale, especially based on your relocation.
0 votes Thank Flag Link Tue May 14, 2013
Hi Tim -- there are so many variables that a realtor cannot accurately assess your situation, regardless of what they're telling you. My advice would be to call a LOCAL lender in Denver. I refer my clients to Fairway Independent Mortgage. Ask for Andrew Gallegos at 303-347-7565.

Even if you're not ready immediately, Fairway works directly with a credit repair company -- all of this is 100% free and without obligation fyi. I've seen this company perform miracles for people.

Hope this helps, Julie Montgomery, Denver, CO http://www.jmontgomery.com
Web Reference: http://www.jmontgomery.com
0 votes Thank Flag Link Sun Feb 10, 2013
It's probably pretty confusing based on sometimes even us in the industry can't keep up with current guidelines and changes! My recent experience has been that it is possible for buyers to get a loan teo years after a short sale. I am an agent in Colorado Springs and have worked with several people in this situation. While it is in many cases very difficult to go through it is not that unusual in these times and definitely not the end of the world. My advice is to find a mortgage person you can work with that has lots of experience, good references and willingness to work hard. They can guide you in the best direction. It looks like you have moved to Denver, a great city!

Best of Luck!
0 votes Thank Flag Link Sat Feb 9, 2013

After a short sale most lenders will require you to wait 3 years before your next home purchase. FHA requires a 3 year waiting period just as does a foreclosure. Conventional can sometimes be a longer time frame. I would develop a relationship with a local 'portfolio' lender and let them guide you to the best credit and time frame for their lending products. All is not lost. The time will be here before you know it. Keep your lines of credit clean and save money for your next home. After 3 years you will also be qualified for some of the low interest and low downpayment programs that apply to first time homeowners. All the best.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes Thank Flag Link Sat Feb 9, 2013
Welcome to Colorado! I'm sorry you had to experience the trauma of a short sale, but I'm glad you haven't given up on homeownership.

Our market here is pretty healthy, barring unforeseen circumstances you will hopefully never again be in the position where you need to turn to such a stressful solution.

On to your question - George did give a good answer, but I looked at his website and don't see that his company works in Colorado. Still, you can contact him directly by clicking on his name to see if he can give you a Colorado referral.

I agree with others, that the best thing for you to do is to start now, interviewing lenders. Find out what their underwriter guidelines are, and be sure to tell them the short sale was due to a job transfer. Also, as Donald mentioned, it makes a difference whether or not you were current on your payments.

If you want help that I can provide as an agent, feel free to contact me. It's not unusual for me to assist homebuyers for months or even years if necessary, before they are in a position to buy.
0 votes Thank Flag Link Tue Feb 5, 2013
George...Your last line intrigues me: "you just need to find the right Loan Officer who works for the right Lender."
That can mean one of two VERY DIFFERENT things.
Thing 1: "If you find a Sleezy Loan Officer that works for a Sleezy lender, you can get a loan that you probably do not deserve, like the many that were handed out and caused the huge problem we are in today"
Thing 2: "If you find an honest, hard-working Loan Officer who really knows the rules and works for a company that exercises common sense when dealing with financing"

It sounds to me like you intended Thing 2, but if I were a buyer I would really like clarification of that statement.
0 votes Thank Flag Link Tue Feb 5, 2013
George, what is your company here in Colorado?
0 votes Thank Flag Link Tue Feb 5, 2013
Good question. Please contact Ryan Davis at Equity Loans at 303-717-4330. He will be able to answer your question and help you with financing a new home.

Marina Bay
Cherry Creek Properties
0 votes Thank Flag Link Mon Feb 4, 2013
Should be able to get a Fannie Mae backed mortgage two years after our short sale closed; but always suggest that you speak with a lending professional first. Good idea to do that now, so if there are other issues in your credit history that need to be addressed, they can be dealt with well ahead of time.
Sorry about that.
Chuck Strauss
Your Castle Real Estate
0 votes Thank Flag Link Mon Feb 4, 2013
Hi Tim,

You will have to wait 3 years until you can qualify to purchase another home. That is for FHA. Not 100% sure for conventional loan.
0 votes Thank Flag Link Mon Feb 4, 2013
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