Becoming a homeowner again after a short sale-How soon can you do it?
May 18th, 2010 categories: Short sales
As a real estate agent, I always get confronted with the burning question regarding short sales and homeownership. Because there is a lot of confusion onthisp topic, I want to clarify this as much as possible, especially because FHA came out with an interesting new guideline that might surprise many short sale homeowners who wish to buy again after doing a short sale.
Part of the confusion comes from the creditors themselves. When a mortgage lender agrees to a “short sale” there is a certain way that the loan is to get coded in the files they send to the credit bureaus. It is supposed to read as a “negotiated settlement” with a zero balance. The issue is that different “big banks” report short sales differently. If it is reported as a foreclosure instead of a short sale (happens all the time) then the customer gets the short end of the stick and a messed up credit. Unless you get the way the loan is being reported corrected, there is nothing anyone can do. The score is hurt more than it should be, and you are perceived as having a full foreclosure instead of a short sale. Assuming the file is being reported correctly, here are the guidelines for when a borrower becomes eligible to get a new loan:
- FNMA – two years from conclusion of short sale
- FHA – three years from conclusion of short sale (exception below)
- VA – two years from conclusion of short sale
Now, FHA has recently come out with an interesting exception. If the borrower was current on the mortgage and all of their installment debt at the time of the short sale on the previous property, and the short sale is declared “paid in full” then you can get a FHA loan immediately after the conclusion of the short sale. Now, I don’t know how many short sales have been done where the mortgagor never went delinquent, but I guess it could happen!!! If you work with one of those, then you might be able to get a FHA loan right away without the typical three year waiting period.
For more information on Sacramento real estate, please contact Carmen at 916-342-2446, or e-mail at carmen@carmenmicsa.com. Also to receive free listings, go to www.Dynamicsacramentohomes.com. And last, but not least be sure to ask for your 7-night cruise when buying with Carmen and her team of experienced agents, as well as a $500 credit to your closing costs if you mention this blog article.
