Remember that if you start the short sale process through an agent,your chance of buying another property is very very low.I have many short sale properties that the owners have the same situation .A lender will give you no loan or if does give you hard time for another property to purchase.The simple reason is that when you start the short sale process,one of the requirement by you existing lender is that you poivide a detail hardship letter and explain the reason why you can not continue payment on your motgage.This is the reason that you can not buy another property whithin 2 to 3 years.The new lender will always ask you if you were not able to continue the payment in the last property,how you will be able to make payment in the new property.

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Your real issue is that if you were to qualify for the short sale, AND simultaneously try to buy a new home, you probably will not qualify.

With a short sale the time to wait for a new purchase is two years.

Personally I would look into renting your property. It is not easy, and may not work, but it would definitely be one of the options you should examine. Talk with A CPA regarding tax implications both during the rental period and at the time of sale of the asset.

Hello SFO,
Thanks for the clarification on "0X30 mortgage rating" ... nowadays, the terms "30", "60", or "90" days late or derogatory" are often used by mortgage lenders whom I work with.

I can share with you my business experiences this year so far...I've represented mostly buyers - although many of my clients are strong buyers with +750 credit profiles and all have +20% down payment with steady income; many have experienced various challenges in getting their mortgage loan approve.

Many traditional banks (direct lenders) have swung to the far right (or far left ... doesn't matter) and have notably tightened their lending guidelines. They are looking for scores of 720 or better, 5-10% down payment for FHB, and at least 20% for investors, 2 years full tax returns, VOE, full bank statements, current pay stubs, new appraisal guidelines, etc.

Most of the mortgage loans being made now are the traditional meat and potato, bread and butter types of transactions, or government sponsored loan programs - FHA, VA, Fannie Mae, Freddie Mac. Very few, if any, banks are doing cash-out refi, bridge loans, construction loans (except FHA 203K Rehab.)

In the past, private lenders and mortgage brokers were willing to lend to borrowers with blemished credit and many of these lenders are no longer around. Although some are still around but the cost to borrow with them is high.

I hope the information helps.

Definitely keep in contact with your lender and exhaust all of their options to see what kind of programs they can offer. I really couldn't say how long until a bank will lend to you again. There are always new regulations in the lending field so I might talk to an active local lender and get their opinion.

If your lender can provide some sort of program where you don't have to sell, that is definitely your best option. The short sale process can be very long and drawn out for all parties involved. Patterson currently has a lot of inventory and the many of them are short sales and foreclosures. This is driving prices down further in Patterson as I'm sure you are aware.

Good luck and I hope everything works out!

Thanks for answering Jenny.

Full disclosure. I spent 10 years in the lending business. I have been out of the business for a few years now, so I have no idea what lenders are looking at in regards to qualifying since the mortgage crisis hit. In the past lenders used to evaluate borrowers situations in a case by case basis (e.g. if someone was 0x30 for 24 months and then had a non-default short sale that was all taken into consideration). I'm just wondering if that still happens.

I am still waiting to hear from my current lender, so It's not like I am running to put my house on the market. I am just wanting to evaluate all of my options. Formulate a "Plan B".

Jenny 0x30 means NO late payments greater than 30 days (which is reported to the credit bureaus). Sorry if that term is no longer used.

A late payment is a late payment. So while you have never been late in the past, if you pursue a short sale, to many lenders, it is consider a negative and your blemished credit will remain on your credit profile for at least 3 years. Your cost of borrowing during the 3 year period will be high.

Once you have a short sale record on your credit report, it will be extremely difficult for you obtain a new mortgage, even if the new mortage is less expensive. If you were the bank, and if you know that your new customer, who is requesting a new mortgage loan, has pasted experience of non-repayment on a mortgage, would you lend to this new customer? Most lenders will not because you did not honor your responsibilties on the previous mortgage obligation.

Based on your comments, living closer to your jobs is a personal preference rather than a requirement by the employers. So if you don't have to sell, don't sell and try your best to work with the current lender to modify your current loan to a manageable payment schedule.

However, if you are unable to sustain the current payment obligation and unable to work out a loan modification with the current lender, then a short sale is better than a foreclosure or a bankruptcy, i.e., cut your losses so that you can rebuild your finance position sooner.

btw...what is a "0X30 mortgage rating"? What rating is this that you trying to maintain?