At least your honest as many with Short Sales, Foreclosures, and BKs are in complete denial and somehow, in their minds, feel they should qualify for good loan terms, like nothing ever happened!
You can't have committed what Banks view as" Mortgage Homicide," then shop like nothing ever happened! Its the weirdest thing, they'll shop as if they're perfect 800 score borrowers who did not walked away from their financial obligations and promises to re-pay money loaned to them. Then can't understand why they have to pay higher rates and costs!
Talk about a sign of the times with this "Entitlement Society" way of thinking that has emerged in America!
Here are the facts, if your credit is bad:
1. you will need a much larger down payment
2. you will pay points, more than good credit borrowers
3. you will have a considerably higher interest rate than a good credit borrower
...or you will not buy a house in today's market
However, at least you'll be able to buy at these low prices, re-establish credit and then refinance asap.