Credit Report Dilemna

[HiLine]

Great advice has been given in this thread. I would also analyze the worst case scenario a little more: how much would it cost to pay private mortgage insurance for 4 months? Can you get your lender to put the refinance promise in writing? If you do FHA and are concerned about mortgage rates rising in 4 months, can you put a smaller down payment now and put a bigger one when you refinance?
If the cost turns out to be minimal, I wouldn't be too concerned about your lender's proposal. But make sure you get them to uphold their promise; the fact that they didn't bring up the foreclosure issue until this close to the closing date would get me anxious about their credibility.

[StartingOver10]

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@spark01 wrote:

StartingOver - We have all of the documentation necessary to show the short sale, but our mortgage lender is not willing to put the conventional loan application into underwriting = with the credit report showing a foreclosure.  

The short sale happened 5/11.  I didn't realize there were other financing options such as portfolio loan.  I will look start looking at other lenders.  

I appreciate your advice and will report back!

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I agree with Dallas - if you can fix it on your CR, then do that. But if you can't, then the portfolio lender is the next best option. Be careful, many of the lender's claim to be portfolio lenders when they aren't really portfolio lenders as much as portfolio servicers. In other words, they continue to underwrite based on Fannie Mae or Freddie Mac guidelines and that defeats the entire purpose of a portfolio lender. 

If you go shopping for one, tell the LO your exact situation (4 months short) and see if the u/w will approve it. That is the only way you will know for sure. It will save you time and effort running up blind alleys looking for the one that is a true portfolio lender that can handle your specific situation.