I have a client that wants to buy another home but told me he had a short sale 3 months ago and was told that he could not buy another home and that the short sale showed up as a foreclosure on his credit report.
I believe that it stays on the report for as something that can be held against you for 2 years. I could be wrong and welcome the correct information.
I have not seen any credit reports, post short sale
It does show up I hear, and it is up to a couple years or more.
Fannie Mae released a guideline on June 25, 2008:
Short sale - 2 years
Foreclosure - 5 years
Bankruptcy - 5 to 7 years
Here's link to their guideline ...
Real Estate Advocate
Maryann, it depends on the lender, some don't care if it's on your credit report BUT will charge a higher interest rate (hard money)!
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Regina P. Brown
Allison James Estates & Homes
Fannie Mae and Freddie Mac indirectly account for around 50% of all mortgages as they purchase about 50% of all new loans on the secondary market. The is means that your buyers will not get a loan for two years if their lender intends selling it to Fannie or Freddie. However, your borrower may get a loan from a portfolio lender that will not sell the loan to Fannie or Freddie. Small banks will often have portfolio loans but will require a larger down payment to offset the lower FICO score.
Please also note that the 2 year wait is a Fannie and Freddie guideline and doesn't apply to other credit applications like for a car, overdraft or credit card etc.
The real damage is that your buyer probably has 30, 60 and 90 day lates on a mortgage account. This will have a very negtive effect on his / her FICO score. The second problem is that the debt will be written off and will show on his / credit report - also very bad for FICO score.
This means your buyer is a sub prime buyer and unfortunately there are very few sub prime lenders left in the market.
I hope this information doesn't completely ruin your day :)
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