{"id":456,"date":"2012-01-12T09:35:19","date_gmt":"2012-01-12T13:35:19","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=456"},"modified":"2012-11-11T11:19:57","modified_gmt":"2012-11-11T15:19:57","slug":"buying-home-after-foreclosure-or-shortsale","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2012\/01\/12\/buying-home-after-foreclosure-or-shortsale\/","title":{"rendered":"Buying a home after a foreclosure or shortsale"},"content":{"rendered":"

by Dan Krell
\n\u00a9 2012
\nDanKrell.com<\/a><\/p>\n

\"\"<\/a>If you\u2019ve been through tough financial times, you know that it feels as if your financial picture may never improve. But for most people, experiencing a financial challenge turns out to be just a blip in time; they eventually move on with their life. Given that notion, mortgage lenders know that people endure temporary financial problems through their lives- underwriting guidelines may allow for a past foreclosure, short-sale, or even bankruptcy.<\/p>\n

In the old days (prior to desktop underwriting), underwriting was \u201cmanual,\u201d meaning that a loan\u2019s approval or denial was decided by a human who reviewed your file. If you were lucky enough to borrow from the local small neighborhood lender, there was a very good chance they knew you, your family, and your financial circumstances (much like the Bailey Building and Loan from \u201cIt\u2019s a Wonderful Life\u201d); you had a chance to provide explanations and compensating factors to increase your chance of being approved.<\/p>\n

Today, mortgage underwriting is mostly accomplished through automated systems, such as \u201cDesktop Underwriter\u201d and \u201cLoan Prospector.\u201d The automated systems make decisions based on algorithms and do not have the ability to weigh circumstances for negative reports on a credit history. Some lenders may still provide manual underwriting, but borrower requirements have become increasingly strict (including higher minimum credit scores).<\/p>\n

Take heart; you still may be able to get a mortgage after a foreclosure, short-sale, or bankruptcy.<\/p>\n

For conventional mortgages underwritten with Fannie Mae guidelines, you\u2019ll have to wait at least seven years after a foreclosure. Likewise, you\u2019ll have to wait seven years after a short-sale- unless you can muster a large downpayment (you may be able to qualify: after two years with a 20% downpayment; and four years with a 10% downpayment)! You\u2019ll have to wait four years after a chapter 7 bankruptcy is discharged; and two years after a chapter 13 is discharged (but four years if the chapter 13 is dismissed).<\/p>\n

For FHA mortgages, you\u2019ll have to wait at least three years after a foreclosure, two years after a chapter 7 bankruptcy discharge, and one year current on a chapter 13 payment plan (with court approval). A short-sale is differentiated depending if the loan was in default: if the loan was not in default at the time of the short-sale and your previous 12 months payments were timely, you may be eligible for a FHA mortgage; however if the loan was in default prior to short-sale, you will have to wait at least three years before you can qualify.<\/p>\n

If you are eligible for VA financing, you will have to wait two years after a foreclosure, short-sale, and chapter 7 bankruptcy (one year into a chapter 13 payment plan with court approval). However, if your foreclosure or short-sale was on a VA mortgage, then your eligibility may be reduced.<\/p>\n

\"\"<\/a>If you\u2019re financial issues were caused by circumstances beyond your control, you may be able to get an exception that could shorten the waiting periods. However, you\u2019ll have to provide documentation for the underwriter to review, and not all lenders grant such exemptions.<\/p>\n

There are many different mortgage programs, and underwriting guidelines vary. The timelines and requirements posted here are as of time of article; it\u2019s very possible that these guidelines will or have changed. It\u2019s important to talk to a licensed loan officer to know what you need to qualify, as well as which mortgage program will be best for your particular circumstances.<\/p>\n

More news and articles on \u201cthe Blog\u201d<\/a>
\nThis article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of January 9, 2012. Using this article without permission is a violation of copyright laws. Copyright \u00a9 2012 Dan Krell.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Dan Krell \u00a9 2012 DanKrell.com If you\u2019ve been through tough financial times, you know that it feels as if your financial picture may never improve. But for most people, experiencing a financial challenge turns out to be just a blip in time; they eventually move on with their life. Given that notion, mortgage lenders … <\/p>\n

Continue reading “Buying a home after a foreclosure or shortsale”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[15,270,55,13,78],"tags":[481,516,799,490,821,480],"class_list":["post-456","post","type-post","status-publish","format-standard","hentry","category-foreclosure","category-home-buyer","category-mortgage","category-real-estate","category-short-sale","tag-bankruptcy","tag-buying-a-home","tag-foreclosure","tag-home-buyer-2","tag-mortgage","tag-short-sale-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-7m","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=456"}],"version-history":[{"count":10,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/456\/revisions"}],"predecessor-version":[{"id":1076,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/456\/revisions\/1076"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}