Buying a new home after Short-Sale

The problem with the credit when people do short sale is usually not so much from short sale, but the lates accumulated during the short sale process.

This is a lengthy process and when it takes peolle 4-6 months, this time is reported (as far as I understand) to the credit bureaus and they show late ofver 90-120 days.

I think this is what hurts the credit

I don't know the answer but it's an interesting question since there must be times when people who are good about paying the mortgage are, for example, forced to move for a job. That brings another question - do corporate relo packages "eat" the difference or do THEY sell short. I also wonder if the gov is going to do something about cleaning up everyone's credit after this whole mess sorts itself out? Thanks for making me think about this. I will look forward to learning from the answers you get

My roomie and I were just talking about credit reports and we were wondering how much less damaging a short sale is compared to a foreclosure.  Your quesiton is related and I'll monitor the responses.  Aloha

I read that short sales are less damaging to the credit. Then an attorney said it doesn't make any difference unless the seller agreed to take a loan for the difference on what they owed and the sale price. I would like to know the answer too

I don't think that the extenuating circumstances are relevent. I think it's two years regardless of circumstances.

I've been told that as long as the short sale wasn't on an FHA, then you can purchase with an FHA loan in two years with solid credit in between and a good explanation. I've also been told directly from Rural Development, that they will look at and manual underwrite a borrower with a recent shortsale with some restrictions: Life changing event had to lead to the short sale, and that the loan has to be reported as 'debt settled/no further balance due'... Not sure how much RD is available in your parts.

Okay this is an older post...but what about today April 2009.  I have managed to work my way through a current mortgage and short sell the property with a credit score pre short sale of 760.  Is there an option even to buy rural given we can prove loss of income to afford short sale, but still enough to own much smaller home?????