May 8th, 2012 5:04 AM by Kathy Delbridge
Do You Really Know the Rules On Short Sales and Obtaining a Mortgage after a Short Sale
After being the in mortgage industry for over 10 years, one of the many important lessons I have learned is to be careful in your interpretation of lending rules and guidelines. Understanding how a short sale can affect you when obtaining a mortgage after a short sale is one of those rules where you must be careful in your interpretation of the rules.
I recently had a closing with a client who would not have just had that closing had they not also taken the time to speak with me, AFTER they had been told "NO" by another lender.
This particular client had a short sale which had occurred about a year and-a-half prior to being in contact with me.
When the first lender looked at the client's credit report and saw the verbiage that the client's mortgage had been settled for less than the amount owed ( meaning they had a short sale) and since that short sale occured 1.5 years ago, this lender informed the client that they would need to wait a full 3 years after the short sale before they could obtain a loan via FHA financing.
While FHA guidelines do state that under most circumstances, a borrower is not eligible for FHA financing after a short sale, until 3 years from the date of the short sale, there ARE some extenuating circumstances and other factors that WILL allow financing before 3 years.
It is vital that borrowers with a previous short sale insure all the facts are considered before being given an automatic NO and told to wait 3 years. If you are one of these borrowers or if you are an agent working with a borrower with a previous short sale, make sure their lender has considered all the facts and reviewed their case carefully.
I am glad these buyers contacted me and even more glad that we got their home loan closed recently. They literally went from a " No, you can not buy" to a "Yes, we can get that done and close you right away". We were at the closing table within 2 weeks of them going binding on a contract for their new home.
That's one the many reasons I LOVE what I do.
Best wishes and call me if you need professional, knowledgeable and consultative advice.