Purchasing After a Short Sale or Foreclosure

November 17, 2013 @ 6:13 pm Posted by starwest 0 [hupso]

The real estate market is bouncing back after a long slumber. Analysts across the nation are becoming more optimistic that the rebound will be stronger than previously predicted now that it is gaining momentum….

Barclays Capital recently put out a report forecasting that home prices could be back to peak levels as soon as 2015. “In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand,” said Stephen Kim… CNN/Money

Many areas of the country are experiencing a shortage of listings because many are taking advantage of record low rates while prices are still affordable. The question we are hearing from many is –when can I purchase again if I have had a previous foreclosure or short-sale?

From the Wall Street Journal… “Boomerang” buyers who waited out the period following foreclosure to be considered eligible for a mortgage account for a large number of new buyers. Moody’s Analytics says households that endured foreclosure and now may qualify rose to 729,000 in the second quarter and could hit 1.5 million by early 2014.

Every situation is different. The type of financing, amount of down payment, present credit situation and more will all factor into this determination. Individual lenders may handle each situation differently. We have taken the time to compile a table of agency guidelines on short-sales and foreclosures.

A few words of caution regarding these guidelines…

  • Individual lender requirements may be more restrictive than governmental agencies, but cannot be less restrictive. In addition, if you are putting down less than 20% on a conventional loan, an applicant will also be subject to the guidelines of a private mortgage insurance company that may be more restrictive than Fannie Mae.
  • The “effective date” of your foreclosure or short-sale may not be what you think it is. For example, if the bank has not filed the paperwork necessary to record the transaction – or did not do so on a timely basis – then the clock did not start ticking when it should have. We can verify your official transaction date. Just contact me and I will research the information and verify the correct date so you have it for your records
  • Extenuating circumstances to shorten the minimum time frames are extremely restrictive as are the requirements for reestablishment of good credit. Circumstances may be limited to extreme circumstances such as death of one of the owners, uninsured illnesses or loss of employment

With these caveats in mind, we hope you find this table below helpful.

Note that this information is provided for informational purposes only and should not be considered a commitment to lend. 

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