Dylan, Home Buyer in San Francisco, CA

Short sale "statute of limitations"?

Asked by Dylan, San Francisco, CA Wed Dec 28, 2011

How soon after a putting your home through a short sale are you eligible to buy again?

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Robert D Hug…, Agent, Devon, PA
Wed Dec 28, 2011
BEST ANSWER
I would think Dylan 3-5 years would be a good estimate. The most important aspect is establishing better credit as soon as possible. Most credit scores after short-sales and foreclosure conditions dip down to low 500's. Of course money talks, and the more investment you make in the next property the better your chances as the lenders risk is less. FHA or some other type of government or community program may be your best bet.

Contact only reputable people Dylan, as there are a lot of scammers looking to take advantage of people in your circumstance. Best of luck to you. Hang in there you are not alone!

Happy New Year to you,

Rob Hughes-Long and Foster Real Estate INC .
0 votes
Robert D Hug…, Agent, Devon, PA
Wed Dec 28, 2011
One other thing Dylan, don't rule out Owner Finance properties. This will allow you to circumvent the typical Fannie Mae, Freddie Mac lenders. Keith is also providing valuable advice. If the lender doesn't have to sell in the secondary market your loan, and they keep the loan, it's their banks/credit unions decision. There are always more than one way to skin a cat.

Knowing the right people makes all the difference.

I really do hope all things work out for you. I work with many people in your same situation.

Rob Hughes-Long and Foster-Real Estate INC.
1 vote
Dylan, Home Buyer, San Francisco, CA
Wed Dec 28, 2011
Thanks for the quick responses everyone. I only wish I had all cash to buy my next place. Unfortunately I will be at the mercies of the banks and have to play by their rules, which seem to set a minimum of three years. Ah well.

I feel fortunate to have had my short sale approved and processed so I'm not complaining....yet.
1 vote
Keith Rockma…, Agent, San Francisco, CA
Wed Dec 28, 2011
Hi Dylan,

It depends on the lender. I know of one credit union and one bank that allows people who short sale to repurchase with only about 3-4 months seasoning. It depends on hardship, area and bank guidelines. It's all about proper research and relationships. I'm happy to share the info.

Keith Rockmael
Real Estate Advocate
Keith@ResourceRock.com
Web Reference:  http://bayarearesource.com
1 vote
Michael Cheng, Agent, San Jose, CA
Wed Dec 28, 2011
There's no restrictions on when you can buy a home in this country. You can anytime you want.

On the other hand, if you need to borrow money to finance a purchase, you may not be able to qualify for the best loans after your credit ratings take a hit after a short sale. The average borrower with a 700 credit score needs about 2-3 years to rebuild the damage.
Web Reference:  http://www.archershomes.com
1 vote
Jed Lane, Agent, Petaluma, CA
Thu Dec 29, 2011
It is possible to not have the short sale reported to the credit bureaus. I've been told that the lender is under no legal obligation to report the incident and if you ask they might go along.
The term "statute of limitations" isn't the right term though. You are asking how long it will take for your credit to be repaired and that will depend on a number of factors I understand. Much of these time periods are based on foreclosure and bankruptcy time lines and assumptions that the credit market will be the same as it is now.
Are you considering a strategic default? I have other clients talking about doing that and am looking stories about how folks are arriving at this decision.
0 votes
, ,
Thu Dec 29, 2011
FHA 3 years
VA 2 years
FNMA or Freddie 7 years

If by chance you had a short sale with no late payments, FHA can consider it, but do not hold your breath, as it will be looked at with a fine toothed comb.
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Thu Dec 29, 2011
"Statute of limitations" would refer to fraud. If the short sale transaction was based on fraud (hid assets or income from the lender) then the status of limitation is based on the type of lender, loan and location of the property are all factors. Good luck,
0 votes
Steven Ornel…, Agent, Fremont, CA
Wed Dec 28, 2011
Dylan:

FHA financing normally requires THREE years from the short sale;

HOWEVER, IF 1) the mortgage payments were made on time within the 12 months prior to the short sale, and 2) you aren't looking to purchasing a similar or larger home in the same area as short sale you can actually buy the very NEXT DAY after escrow closes on your Short Sale.

Conforming loan guidelines state a minimum of TWO years and 20% down; however, if the short sale was due to documentable "extenuating circumstances" (divorce, medical, job loss, death of a wage earner, etc.) then you only need 10% down. See: https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel122011.pdf page 451

Need a referral for a loan broker/banker that offers both conventional and FHA options to examine your actual situation?

-Steve
0 votes
Terry McCarl…, Agent, Cape Coral, FL
Wed Dec 28, 2011
To get a loan you normally have to wait 3 years. Talk to a lender for details.
0 votes
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