We did a short sale over two years ago. What Calif banks follow the FHA three year wait to get new loan? I'm finding banks impose an even

Asked by Ejtraxler, Camarillo, CA Sat Oct 15, 2011

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14
Barry Shapiro, Agent, Camarillo, CA
Sat Oct 15, 2011
This is an excellent question. Check out the latest Fannie Mae guidelines: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/se… After a deed-in-lieu of foreclosure, preforeclosure sale, or short sale, there is a mandatory waiting period of two years for a loan with an 80% maximum LTV (loan-to-value ratio), or four years for a loan with a 90% LTV. If the borrower can document extenuating circumstances, the waiting period for a loan with a 90% LTV drops to two years. As of Feb. 2011: 2011 FHA Waiting Guidelines
Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy.

You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy

Foreclosure - You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.

Short Sale / Notice of Default – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.

Credit must be re-established with a 640 minimum credit score
2011 VA Waiting Guidelines
Bankruptcy - You may apply for a VA guaranteed loan TWO (2) years after a Bankruptcy

Foreclosure - You may apply for a VA guaranteed loan TWO (2) years after a foreclosure

Short Sale - You may apply for a VA guaranteed loan TWO (2) after a short sale, unless it was a VA loan then restrictions apply

Credit must be re-established with a minimum 620 credit score
2011 Conventional Waiting Guidelines (Fannie Mae)
Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.

Foreclosure - You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,

Short Sale / Notice of Default – Currently treated the same as a foreclosure with a waiting time of SEVEN (7) years before you can buy again using a Fannie Mae conventional home loan.

Credit must be re-established with a minimum 660 credit score.

Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.
Consult with your LENDER for current policies.
2 votes
Roy Bush, Both Buyer And Seller, Phoenix, AZ
Sun Aug 4, 2013
CFS Mortgage, http://www.cfsflex.com, has a flexible loan program. They allow a mortgage after a foreclosure, short sale, or chapter 7 bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes
Patti Kane, Home Buyer, Boulder, CO
Sun May 12, 2013
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
0 votes
Jared Karayan, , Camarillo, CA
Thu Aug 30, 2012
Ejtraxler, lots of things go into the decision as to weather or not a bank will make the loan now after your short sale of more than 2 years ago. I am NOT a lender and cannot commit to being able to get you a loan. Were you or your spouse ever in the Military? if so VA may be the way for you to go as their guide lines are different than FHA. Remember that just because a program looks like it fits doesn't mean a bank will loan to you! My advice is interview a view solid local lenders, pick one you trust and are comfortable with and do what ever they say to do in order for their bank to see you as credit worthy again.
0 votes
Robert Chome…, , San Diego, CA
Fri Dec 30, 2011
FHA loan you only need to wait 3 yrs after a short sale. Most banks will follow this 3 year rule period.

There are extenuating circumstances where it can be less than 3 yrs but 99% of borrowers will not pass this. The extenuating circumstance has to be something like a major illness that can be fully documented or a job transfer that forced the sale, AND you cannot have missed any loan payments leading up to the short sale.
0 votes
Blanca Dover, Agent, Camarillo, CA
Fri Dec 30, 2011
The answer to this question does not have any clear cut and dry answer. I haven't see a "list" of California banks which follow the FHA 3 yr wait that I can readily give to you. Banks typically have the authority to lend to whomever they want but will generally follow the guidelines set forth by government entities such as Fannie Mae, Freddie Mac and FHA since they work with lenders to guarantee loans and free up money to provide mortgages. There are some lenders of course that will take greater risks with some borrowers than others.

Below are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale:

Short sale with FHA Loan

â– Can purchase right away with no mortgage default
â– 3 year wait if in default at the closing
â– Reduced wait if the borrower has re-established good credit and can show extenuating circumstances

Short Sale With Fannie Mae Loan

â– 2 year wait if the borrower puts 20 % down
â– 4 year wait if the borrower puts between 10% to 20% down
â– 7 year wait if the borrower puts less than 10% down
â– 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down

Short Sale with Freddie Mac Loan

â– 4 year wait before being able to get a loan
â– 2 year wait if the borrower can show extenuating circumstances

Going through either a short sale has the potential to seriously impact your credit and your credit must be re-established with a 640 minimum credit score. I hope this helps.
Web Reference:  http://www.blancadover.com
0 votes
Robert Chome…, , San Diego, CA
Wed Oct 19, 2011
It's is only a 3 year wait for FHA. 2 years for VA and 2 years for conventional with 20% down, 4 years for conventional 10% down. There is no issue after 3 years after short sale for FHA. I handle these loans all the time.
0 votes
, ,
Tue Oct 18, 2011
Welcome Barry.

Happy funding, Rudi
Web Reference:  http://www.umboc.com
0 votes
, ,
Mon Oct 17, 2011
First, all lenders and banks are not playing using the same rule book. So when you read the answers below or in other blogs, they should be answering as per their own guidelines not in generalities. So in my case, let me state the key factor. If you were delinquent on your loan at the time of closing, that can make all the difference in the world. If you were late, I can promise you your options are extremely limited, but do-able. If you were not late on your mortgage, I can personally guarantee to you (at least here in CA) with actual closed escrows and borrower and realtor references, that it is possible not matter what you have heard or read before. Please remember buying after a short sale today is a slippery slope and the lines has become very blurry specifically in past several months. I'd had the greatest luck getting people into another home with either a VA or USDA. Neither program has specific restrictions regarding short sales, only the lenders or bank have placed their own specific limitations on these products. Generally speaking, I am extremely successful with these two loan programs with or without being late on their mortgage if it make sense. And that is without having to wait the 2-3 years as written below. My last USDA purchase after a short sale (with lates on their mortgage at the time of closing) was 12 months after the short sale, and my last VA with lates on their mortgage was 1 year also. FHA would be the next option, but if you were late and didn't have a major cataclysmic event happen, you're most likely out of luck until 3 years. But if you were current at the time of close, I have an investor who will buy these loans from us if we follow the HUD Guidelines as written in the 4155.2 Lender's Handbook (see link below for specifics). So in closing, after years and years of doing government loans and specially a lot research as to what certain investors will allow and not allow, I have come up with a few (very few) investors who underwrite to HUD guidelines, not their own. Which makes it easier for me to help people like you. Please let me know If you have any further questions.
0 votes
Barry Shapiro, Agent, Camarillo, CA
Mon Oct 17, 2011
Thank you, Rudi!
Here is a more complete list, including Short Sales, Bankruptcy, Foreclosure & Deed in lieu scenarios >>>
How Long Do Potential Buyers Need To Wait After A Bankruptcy, Foreclosure Or Short Sale
Before Obtaining Financing?
Below is a summary by loan type of the waiting periods
NOTE: Exceptions “may” be available on each program! See lender for further details on specific scenarios
CONVENTIONAL
Chapter 7 Bankruptcy ~ 4 years from discharge date Chapter 13 Bankruptcy ~ 2 years from discharge date Foreclosure ~ 7 years from date of trustee’s sale Deed-In-Lieu of Foreclosure ~ 2 years from trustee’s sale with 20% down Short Sale ~ 2 years from completion date 20% down
FHA
Chapter 7 Bankruptcy ~ 2 years from discharge date Chapter 13 Bankruptcy ~ 1 year of the payout must elapse & payment performance must be satisfactory - buyer must receive permission from the court to enter into a mortgage Foreclosure ~ 3 years from date of trustee’s sale Short Sale ~ 3 years from completion date if there were late mortgage payments. Exception: may be able to qualify immediately or one year after sale date if can meet exception guidelines. See lender for more details.
VA
Chapter 7 Bankruptcy ~ 2 years from discharge date Chapter 13 Bankruptcy ~ 1 year of the payout must elapse & payment performance must be satisfactory - buyer must receive permission from the court to enter into a mortgage Foreclosure ~ 2 years from date of trustee’s sale Short Sale ~ No specific information on this yet, assume foreclosure rule of 2 years
USDA Rural
Bankruptcy (Ch 7 & 13) ~ 3 years from discharge date Foreclosure ~ 3 years from date of trustee’s sale Short Sale ~ No specific information on this yet, assume foreclosure rule of 3 years
0 votes
, ,
Sat Oct 15, 2011
Barry,

Excellent link and response. TU

Also, you need to find out what's wrong with your link: http://www.findcamarillohomes.com/

Happy funding, Rudi
Web Reference:  http://www.umboc.com
0 votes
Ariel & Karen, Agent, Hollywood Beach, CA
Sat Oct 15, 2011
I am currently working with two sets of clients who completed short sales less than three years ago. One of them closed in August 2009 and the other closed in March 2009. They have obtained approvals through Standard Pacific Mortgage using conventional 5% products. One of them was eligible through Standard Pacific to utilize FHA financing, but the property she was purchasing was not approved, so she increased her down to 5%. If you are interested in learning more, please contact me directly and I'd be happy to put you in touch with the local loan officer. Thank you! Ariel 805-746-2070 ariel.palmieri@gmail.com
0 votes
, ,
Sat Oct 15, 2011
We follow the 3-year wait on an FHA loan, I know of 2 banks that impose longer waits but I know of over 100 who don't. You also need to re-establish your credit as well, which means 12 months of on time payments, and if there has been any late payments/delinquent marks on credit after the short sale that can extend the time from the short sale to longer than 3 years (some lenders will require you to wait 3 years from the last delinquency). If you'd like help reviewing your situation to see if it'd qualify I'd be happy to take a look. The link in the web reference lets you know what information to be prepared with.
0 votes
Abu Musa, Agent, New York, NY
Sat Oct 15, 2011
The best explanation you can get from a mortgage banker. You may talk to a mortgage banker.Thank you.
0 votes
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