01-31-2012 12:11 PM
I'm curious if there are lenders that will approve a FHA loan with a short sale less than 3 years old.
My short sale closed in June 2009 and my reasoning for doing the short sell was that I was laid off from my job the year prior in October 2008. As a result of the short sale, there were also 30, 60, 90, and 120 day lates on the mortgage.
I know there are certain situations where FHA will allow you to get a loan with a short sale 2 to 3 years old (job layoff being one of them).
I've talked to 3 lenders. 2 of them would not even spend the time on me until I've reached 3 years, the other lender did spend some time but came back saying that they could deal with the short sale being within 3 years, but not with the late payments.
My FICO and DTI are where they need to be. The only problem is the short sale.
I guess my question is should I continue to try to find a lender that might be able to help me, or should I just wait until July when the 3 years is up?
02-01-2012 04:37 AM
I would keep asking around. I have a similar history. I short sold my home in Nov 2010 due to my divorce. I couldn't afford the mortgage with out help from my ex. I was 60 days late when my short sale went through.
I met with local bank LO this past fall to see what my options are in terms of buying a new home. Since my divorce I have moved to a much more affordable area and I am renting a single family. She said that the short sale wasn't so much the issue but the late payments. My credit score like yours has recovered I'm in the 720 range. However she said I would have to wait for at least 2 years and have a 10% downpayment in order to maybe qualify for a conventional loan.
I also met with a mortgage broker to see if there were any additional options. She is currently researching the possibility of a FHA backed loan at my 2 year mark because I would prefer not to use all my reserves on a 10% downpayment. Typically the wait for FHA is 3 years.
So that's where I stand but I would continue asking various lenders and even mortgage brokers what the options are. Are there any other lates or deliquencies on your credit? Or is it just the mortgage lates?
02-01-2012 05:32 AM
The only lates are related to the mortage that I short sold. However, there were 10 months straight of lates, from 30 days to 120 days at the end. I stopped paying my mortagage because I was told that was the only way to ensure that a short sale would be approved.
I did speak to another broker last night and she seemed to believe that they WOULD be able to work with me. She was going to check with her boss and get back to me today, so fingers crossed!
And even if I can't get anyone to help me with an FHA now, its only 4 more months until I reach the 3 year mark.
Any other insight related to this would be much appreciated.
02-01-2012 06:40 AM
Even if the mortgage broker comes back and said she can finance you for a loan 4 months early - there may be additional costs and fees as well as a higher interest rate because your loan will be a non-conforming loan.
IMO, it is better to not apply early. Especially for the sake of just 4 months. Spend the next four months getting your credit and savings into the best possible position before you apply. Then you will be a conforming loan and not have to get hit with extra fees or a premium par rate.
02-01-2012 06:51 AM
I'm sorry. I missed the FHA part.
For FHA you have to meet the minimum criteria, which is three years after a short sale.
Look here for basic qualifing FHA info: http://portal.hud.gov/hudportal/HUD?src=/program_o
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