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Conventional Mortgage with 3 years short sale

Established Member

Conventional Mortgage with 3 years short sale

Hello!

 

We are under contract in our current home and just went under contract in another home. The house we got into under contract is listed at $514,900 and we had a full price offer. It was originally listed at $615,000 but I am thinking it might appraise around $580K. We are putting EXACTLY 20% down.

 

So, here is the deal... we had a short sale which closed in June/2014. Short sale was done because we could not sell the property after a job transfer and tenant was default on rent, we drained the savings keeping the mortgage and HOA payments and eventually ran out of cash to keep it up. We continued to make payments on the mortgage of our main home and no other bills fell thru. Current credit score is 675.

 

I had "pre-approvals" which I found out means almost nothing from 4 lenders. However, one of the lenders already told me the file did not pass automatic underwritting. The second lender told me he passed automatic underwritting otherwise they would not even send a pre-approval letter. The third lender (which is Quicken Loans) said the same, but they put me in a specific program at a higher rate. The program is called Advantage Credit. I tried to find more information about it here and could not find anything.

 

The lender which I am working now said that they might get the mortgage committment soon and he does not see ANY kind of an issue that would not allow this loan to move forward past the credit decision part, pending the property conditions.

 

I would like to hear from others, and experienced LOs. I had other people saying that they doubt ANYONE would be able to make this work, but I have heard mixed comments here and there. I am nervous as we NEED to close by Mar 30th and we are at the "point of no return" right now.

 

Thanks!

6 REPLIES
Established Contributor

Re: Conventional Mortgage with 3 years short sale

The reason for AUS not coming back with an approval would be the short sale as it's defined by their guidelines as this:

 

Short Sale Deed-in-Lieu of FC and Pre-FC Sale: 48 months since completion is required. This waiting period also applies to the charge-off of a mortgage account for DU loans only. LPA may allow for greater flexibilities provided an “Accept/Eligible” recommendation is obtained.

 

The LO should check LP for an approval if he didn't get one with DU.

" EX 683 EQ 691 TU 687 MMS 689"
Message 2 of 7
Established Member

Re: Conventional Mortgage with 3 years short sale

Would you mind explaining to me some of the acronyms? DU, LPA, LP

From what I know automatic underwriting was OK in three out of the 4 lenders.
Message 3 of 7
Established Member

Re: Conventional Mortgage with 3 years short sale

I think I got them:

 

LPA - Loan Product Advisor

LP - Loan Product

DU - Desktop Underwritting

Message 4 of 7
Established Member

Re: Conventional Mortgage with 3 years short sale

Any more information on this guys?

 

I really need to get this moving forward this week, no questions about.

 

 

Message 5 of 7
Established Contributor

Re: Conventional Mortgage with 3 years short sale

You can't go Conv because of the guidelines but you have other loan programs available.

" EX 683 EQ 691 TU 687 MMS 689"
Message 6 of 7
Established Member

Re: Conventional Mortgage with 3 years short sale


@MauiMan85209wrote:

You can't go Conv because of the guidelines but you have other loan programs available.


MauiMan85209, can you recommend a specific one? Or where to find it? I found a few lenders that do portfolio but they want 25-30-40% down in some cases and origination fees + interest rates thru the roof. That's predatory. Requiring more money down and having a person take from their own reserves increases the risk.

Message 7 of 7