You're coming up on the two-year anniversary, you should be able to get a pre-qualification letter and be able to move forward. That is, if there were extenuating circumstances that pushed you into a short sale. Even still, you might have some difficulty finding that lender.
Lending is based in regulations, guidelines and financial institution overlays-that institution's guidelines on top of federal guidelines or the lack of overlays for a specific company. Sometimes it gets down to how an institution interprets a word in a guideline which can make the difference between a loan closing or not. In my opinion, it has gotten easier not harder, but you have to be thorough and know the distinctions, matching that to a given client and situation. I would be happy to help you and can be reached at jdownes@the championbank.com. Good luck in any case.
You may want to put together a well-written hardship letter. Many lenders want to know why a seller felt compelled to short-sale their homes or why the seller allowed their homes to go into foreclosure.
Typically, lenders want to see on-time payment of bills since these events and a 640 credit score.
Three years on a foreclosure and two years on a bankruptcy is what I am hearing are the usual requirements.
The waiting period after a short sale or foreclosure varies by the type of loan.
1. A borrower getting a VA loan must wait 2 years from the foreclosure or short sale date before buying a new home assuming their previous loan was NOT a VA loan.
2. A borrower getting a FHA loan must wait 3 years from the short sale or foreclosure date BEFORE applying for a FHA loan. If their previous loan was a FHA loan the 3 year waiting period BEGINS when FHA paid out their insurance claim which is usually 6 months after the short sale or foreclosure date.
3. A borrower getting a conventional loan after a foreclosure must wait 7 years.
4. A borrower getting a conventional loan after a short sale or Deed-in-Lieu only has to wait 2 years IF they are buying their new home with 20% or more down.
4. A borrower getting a conventional loan after a short sale or Deed-in-Lieu only has to wait 4 years IF they are buying their new home with 10% or more down.
Warp to 2012. Every single month since your short sale, underwriting for conventional loans has become more strict (polar opposite from 2005 -2008). Short sales are now recognized as a serious risk although nowhere near foreclosure or bankruptcy.
I have been told 3 years past the date of "paid less than agreed" is on your credit report you can get a new loan. This is just for FHA - no idea of when you would qualify for conventional (probably longer).
This is far better than a bankruptcy for foreclosure in which 7 years is required.