Mortgage after short sale or foreclosure ...

Asked by Vas, Staten Island, NY Sat Jan 18, 2014

I have another post about my short sale. Making some changes and hopefully will work out. Question is that if I want to buy another home down the line, what's the time frame? In the near future my income will be $250k and would have a good down payment.

I've heard that if I have a significant down payment and pay more interest that the "rules" change and that I should look for "portofolio" loans. I'd appreciate any advice.

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, ,
Tue Jan 21, 2014
The portfolio lenders I know are a lot more particular than what you expect. It is true they are not required to follow the same guidelines as a lender origination for the secondary market but that does not mean they are any easier. They may want the name and phone number of your third grade teacher and will ask them if you turned in your homework in a timely manner. That is a slight exaggeration, but not by much.

I assume you are not asking about “hard money lenders.” If I am right, the profile you seek is probably a retail bank, not a small local lender and not an 800lb gorilla either. But a mid-sized regional bank that doesn’t have auditors second guessing their lending practices. So if the bank has been a little wobbly in the past 2 years, they probably can’t do it even if they want to. You are looking for a stable regional or very, very strong local lender that is aggressive in the mortgage arena. Good luck, hope it works out for you,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
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Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sat Jan 18, 2014
It depends really. If you were making mortgage payments on time within the last 12 months before the short sale, you MIGHT be eligible for an FHA loan. If you were in default with the mortgage in the last 12 months before the short sale, you would have to hold out 3 years to be eligible for an FHA loan. Conventional loans require a longer waiting periods before you're eligible for the same options as a borrower who does not have a short sale as part of their credit history..

As far as portfolio loans that allow a recent short sale, I have not heard of any lender who does. But I would be sure that if there was a loan product like this, it would involve a higher rate and not as good terms as a traditional loan.

Feel free to call or email me anytime. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
2 votes
Joseph Runfo…, Agent, Staten Island, NY
Mon Oct 6, 2014
The short answer; the amount of time you must wait before applying for a new mortgage loan depends on the type of lender and your financial circumstances.You may not have to wait to apply for a FHA-insured mortgage loan following the short sale if: you were not in default on the prior mortgage at the time of the short sale, and you made all of your old mortgage and other installment debt payments on time for at least 12 months leading up to the short sale. If you were in default on the old mortgage loan at the time of the short sale, then you must wait at least three years before applying for another FHA loan. The three-year waiting period starts to run from: the date of the short sale, or if the prior mortgage was also an FHA-insured loan, from the date that FHA paid the claim on the short sale. For most other types of lenders, the waiting periods can vary. Most lenders tend to follow Fannie Mae's guidelines for post-short sale mortgages. Other lenders may shorten the post-short sale waiting period, provided that you make a larger down payment (sometimes 25% or more) and agree to a higher interest rate. You will also need to have good credit.
0 votes
, ,
Wed Oct 1, 2014
I work with a handful of portfolio lenders who will allow you to purchase a new home 12 months after the short sale has been finalized. Obviously I would need to make sure you meet all other qualifications prior to issuing your Pre-Approval Letter, just know that there is hope.

I recommend that we speak so we can iron out the details prior to your eligibility. Please contact me at your earliest convenience so we may begin to weigh out options. I may be reached directly via phone or email; whichever method you prefer. I look forward to helping!

Kind regards,

Paul Marzolla
Vice President
Direct: (201) 957-6768

Licensed by New York Department of Financial Services
Member of NAMB - The Association of Mortgage Professionals
Member of New York Real Estate Investors Association
0 votes
, ,
Sat Jun 21, 2014
There is good news for you.
Some consumers think they have to wait 2-7 years after the unfortunate incident of a Foreclosure or Short sale or Deed in Lieu to be able to Purchase or Refinance a Home. Most of these consumers are now renting from a landlord or are living with family or friends to have a roof over their head. However there is a solution to help these consumers get back the Pride of Homeownership and Not have to wait years to buy or refinance their home again. Depending on what State you are in and how many incidents you have had, you may be able to do it Now.
Feel free to contact me so I can share the right path with a solid solutions to your new home goals.

Michael Evans
Loan Officer
NMLS: 251165
0 votes
So you don't have to wait that long? I also assumed there was a waiting period after a foreclosure. If there's a better way around the time building your credit score, then I'd be interested in learning more. There are always exceptions when it comes to specific circumstances-- every foreclosure is different.
Jenn |
Flag Mon Nov 17, 2014
aftervince19…, , Greenville, NC
Wed Apr 9, 2014
Get a flexible credit loan. This program assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
0 votes
, ,
Tue Jan 21, 2014
Depending upon whether your existing mortgage is FHA or conventional and whether the new mortgage will be FHA or conventional the waiting period for getting a new mortgage will differ. Either way just to get any mortgage with the minimum wait, if your present mortgage is FHA and you are looking to get new FHA mortgage then the following must be met:
1. Must be current on existing mortgage and other installment debts at the time of Short sale AND
2. The proceeds from Short Sale serve as full payment.
Keep in mind if you are ineligible, the Underwriter may still approve a new FHA mortgage if borrower was in default on their mortgage due to circumstances beyond their control (such as death of a primary wage earner) and a review of the credit report indicates satisfactory credit prior to the circumstances that caused the default.

For new Conventional mortgage a minimum of two year waiting period is required from completion date fi extenuating circumstances existed that led to short sale. For financial mismanagement leading to short sale a waiting period of Four years is needed from the completion date.

Also keep in mind if there were late payments that led to pre foreclosure, Lis Pendens Notice etc. that may have it's own waiting period requirements.

These guidelines apply to current loans but when you are ready to get a new mortgage all of this may look different. If you have a gainfully employed spouse who is not part of the property in short sale, may be you can purchase the new property in her/his name and avoid the waiting period all together. If you like to discuss this in detail please call me. Contact information is given below.

Sanjeev Ahuja, NMLS #148731
Mortgage Broker
Home Funding LLC
110 Jericho Turnpike Ste 214
Floral Park, NY 11001
Direct Phone 917-517-2552
NYS Registered Mortgage Broker, Dept of Financial Services, Loans arranged through third parties (NMLS # 885573)
0 votes
Dawn Noak, Agent, Hauppauge, NY
Sat Jan 18, 2014
Hi Vas,

I would be happy to email you the guidelines from a lender for a purchase after a short sale as of 2014.
Please email me directly if you would like this.

Thank you,

Dawn Noak, LSA
Gladstone Group
0 votes
Jimmy Samaha, Agent, Staten Island, NY
Sat Jan 18, 2014
You could contact me if you would like. My email is or you can inbox me on Facebook
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sat Jan 18, 2014
Much will depend on the circumstances that led you to the short sale path; generally with a high downpayment the wait for conventional loan is two years; however for a personalized and accurate answer you really should consult with any licensed loan officer and not rely on other's opinions....
0 votes
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