Surviving the Short Sale Seasoning Status Shift
All alluring alliteration aside, I wanted to get serious (there I go again...) about the recent changes to the waiting periods that are required when a buyer attempts to re-enter the mortgage market. "How long do I have to wait after a short sale?" That's been a question that our industry has faced since the downturn. This blog post is going to focus specifically on jumbo loan amounts and RPM's time requirement for buying a home after a short sale.
Up until just recently (July, 2014), many of us in the industry had become intimately familiar with the guidelines:
- A 2-year wait if the new loan-to-value (LTV) is 80% or less.
- A 4-year wait if the new loan-to-value is between 80% and 90%.
- A 3-year wait at all LTVs.
- Dependent on investor, but mostly a 7-year waiting period.
As of July, 2014, the conforming waiting period after a short sale has been changed to no less than 4 years, regardless of LTV. This implies that between years 3 and 4, if a buyer wishes to re-enter the purchase market, he or she will be subject to FHA's hefty mortgage insurance premium. That is....unless the loan amount exceeds $417,000.
RPM has all along retained an investor who has a 3-year seasoning period for a short sale AND we can start at loan amounts as low as $417,001. Here are some of the other requirements and features of this program:
- 80% LTV to $1.5MM with a 720 FICO
- 70% LTV to $1.5MM with a 700 FICO
- 15 and 30-year fixed, along with 10/1, 7/1 and 5/1 ARM programs
- 43% maximum debt ratio (DTI)
- Great pricing!
Re-entering the real estate market after a short sale can be a challenge when your scenario calls for a jumbo mortgage. But if your short sale happened 3 years or more in the past and you're looking to purchase a home in California, I may be able to assist you right now.
Mortgage Loan Originator
NMLS: 22343 CalBRE: 01297944
Cell: 415-367-5959 Fax: 415-366-1590
1058 Redwood Highway, Frontage Road, Mill Valley, CA 94941
RPM Mortgage, Inc - BRE# 01818035 – NMLS# 9472 - CA Bureau of Real Estate, Real Estate Corporation License. Equal Housing Lender.