Short Sale to Purchase

[Anonymous]

Hello everyone and thank you for all of the information you provide.

I recently went through a short sale.  We finally closed in September after nearly a year of not paying the mortgage or 2nd Loan. The loans are reported as paid for less with $0 balance and the missed payments have been reported.  Other than these 2 mortgage accounts we have never missed any payments and our FICO scores are currently in the 670's.

Here's my question.  I know with a foreclosure there are specific time frames or waiting periods before you can obtain another mortgage.  Being that we went the short sale route, would we be able to qualify for a mortgage with FICO scores in the 670's?  We would be looking at putting 20% down on a $200,000 home.

I'm looking forward to your responses and thank you in advance.

VegasShortSale

[Anonymous]

In California, I'm not sure about other states, the reasons leading to short sale can either help or hurt you when buying afterwards. A lender may be willing to take a risk if finances are in order and the prior loss was due to something out of your control, like there death of a primary. All the same though, I believe the wait period is still two years after short sale. If, however, you short sale as a "calculated risk" there are companies in California that evaluate your financial moves and standing and if they feel you abandoned your mortgage when you were capable of paying they will not loan to you. If they spot a calculated risk it's worse than foreclosure.

[Lel]

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@Anonymous wrote:

Hello everyone and thank you for all of the information you provide.

I recently went through a short sale.  We finally closed in September after nearly a year of not paying the mortgage or 2nd Loan. The loans are reported as paid for less with $0 balance and the missed payments have been reported.  Other than these 2 mortgage accounts we have never missed any payments and our FICO scores are currently in the 670's.

Here's my question.  I know with a foreclosure there are specific time frames or waiting periods before you can obtain another mortgage.  Being that we went the short sale route, would we be able to qualify for a mortgage with FICO scores in the 670's?  We would be looking at putting 20% down on a $200,000 home.

I'm looking forward to your responses and thank you in advance.

VegasShortSale

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You're looking at at least a 2 year waiting period from the time that the short sale closed.  Since you were delinquent on both loans for almost a year, in the eyes of Fannie Mae this would be considered a "preforeclosure sale" even if your lender never actually initiated foreclosure proceedings.  But the semantics don't matter in the end - the waiting period for preforeclosure sales or short sales in which the borrower was never delinquent are the same - minimum of 2 years, but may be longer based on other factors.  The 20% down payment should put you on the shorter end of the waiting period range.

FannieMae Announcment SEL-2010-05

[Anonymous]

You can still get a mortgage, that 2 year time frame is only for Fannie Mae. Conventional is an option.