Buying a new home after Short-Sale

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Mortgage and Lending

I believe the seasoning requirements for borrowers after short sale is 2 years and I also believe the lenders are required to report the transaction on the credit report of the borrower as short sale. Assuming the borrowers had no mortgage lates prior to the short sale, I wonder if the borrowers can buy a new home sooner than the 2 years if they can document extenuating circumstance that led them to short sale their house? Any takers on this?

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Ambassador
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

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

Nov 29, 2008 12:22 PM #1
Rainmaker
29,343
Barbara Nalls
TTR Sotheby's International Realty - Chevy Chase, MD

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

Nov 29, 2008 12:24 PM #2
Rainmaker
496,068
Richard T. Dolbeare, R(B)
eXp Realty - Wailuku, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

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

Nov 29, 2008 12:26 PM #3
Rainer
88,607
Jean Powers
Kane & Associates call 510.908.9002 - Alameda, CA
CRS,e-PRO,HAFA,SFR Broker, Northern California

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

Nov 29, 2008 12:35 PM #4
Rainmaker
1,402,603
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

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

Nov 29, 2008 12:36 PM #5
Rainer
19,170
Josh Holt
RE/MAX Coast To Coast~ Dedicated to You! - Berwick, ME
Southern Maine and NH Real Estate - Your Source of Info on the Berwicks

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.

Nov 29, 2008 12:40 PM #6
Rainer
11,914
Jani Savage
United Broker's Group, Phoenix Metro - Chandler, AZ
Professional Realtor, ABR, CMRE, SFR

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?????

Apr 02, 2009 04:56 AM #7
Anonymous
Veronica Parzygnat

I sold my house 14 months ago as a short sale. As of 2 weeks ago my credit score is 675 my credit report classified the short sale as a negotiated settlement. I paid my mortgage for 8 years with no late and no missed payments  but to qualify for selling as a short sale I had to become delinquent on the last 2 months. I have rented my present residence for the past 14 months with perfect record and will like to become a home owner soon. I need the assistance of a Mortgage Broker with experience in this situation. Any Information is appreciated Thank you Veronica  

Jul 15, 2009 08:50 AM #8
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Hans Iduma

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