As rents rise and low mortgage rates and the economy gradually improves, those who lost their home in recent years will be able to re-enter the housing market. Prepare yourself first and when you are ready - here's the revised waiting period depending on your circumstances:Conventional underwriting guidelines under FNMA.
Government underwriting guidelines under FHA:
Government underwriting guidelines under VA:
According to Transunion 1.5 million "Credit Weakened" Americans were forced out of the housing market by the housing crash will flood the market in the next two years. They are more motivated because they have done it before. As long as their FICO score is 620, had no unpaid judgments or pending liens and had passed the waiting period above. Contact me for your Free Consultation.
Starting in November - short sellers who find their transactions were miscoded on the credit reports and are able to put down 20% will be able to obtain Fannie Mae's approval through its revised automated underwriting system 2 years after the short sale date.
Freddie Mac will also provide its approval after 2 years of short sale date IF borrowers can demonstrate extenuating circumstances such as income reductions due to loss of jobs, serious illness or death of a wage earner that are beyond their control that ruined their credit. Applicants must show 12 months of solid credit behavior and participate in a HUD approved housing-counseling programs.
FHA follows the same as Freddie guidelines and If you can qualify under FHA's back to work initiative - you can obtain FHA financing with 3.5% down in as little as 1 year instead of current 3 years. FHA further stipulated that there must be at least 20% decreased in income for at least 6 months that contributed to their delinquency. Borrowers must be able to demonstrate that they are now back to work paying their bills on time for the last 12 months after the short sale and earning enough to qualify for a new FHA-insured mortgage. Borrowers need not be current 12 months prior to the short sale. Borrowers must attend 1 hour HUD approved housing-counseling programs. This program will be manually underwritten and borrowers need to meet all requirements per the Mortgagee Letter 13-26.
Short sale, Deed-in-lieu or foreclosure- What you should know.
Having a second chance is possible after a short sale. Here are the general guidelines:
If planning to use FHA financing; then:
The last requirement of extenuating circumstances is where it gets cloudy. An extenuating circumstance, according to FHA is one of the following:
If you don't meet the above criteria for FHA; here are the time frames you have to wait before purchasing again for Fannie and Freddie:-Fannie Mae Conventional 2 years with 20% down payment, 4 years with 10% down payment, and 7 years with less than 10% down payment.
-Freddie Mac - 2 years with extenuating circumstance and 4 years for financial mismanagement.
Document why you fell behind such as reduction of work hours, a layoff, an invoice for an auto repair, or a shutoff notice from a utility.
Be persistent in your quest to talk to the right people at the mortgage company. A mortgage servicer has two platoons of employees who talk with delinquent borrowers: the collections department and the loss-mitigation department. Ask for the loss-mitigation department, which consists of people who negotiate forbearances and modifications.
What they'll get back from the lender is a push to get an agreement then and there. Fill out an application and let the lender make an offer first and then consider it for 24 hours. Talk it over with an adviser. Accept the offer if it's a good one; otherwise, make a counteroffer.
Number of free agencies that offer counseling:
Short selling a property - It means that a lender agrees to accept less than what is owed on the property to facilitate a sale of the property.
Tips for closing short sale.
Everyone is unique. Complete the form below and I will contact you personally.