[Moe Bedard]

Wait the two years after the short sale...............also note that if the property forecloses instead the wait will be longer.............

If you short sale or foreclose on a property and buy a new one right after or even before that happens................you will be committing what is called material misrepresentation on the new application which is considered a form of mortgage fraud that the FBI has been looking into............because you would be imploring a new lender to give you a loan based on information that you supply suggesting that you are keeping the first property and everything is o.k.......... while knowing that you are about to foreclose on it.



If considering buying again after a foreclosure/deed in lieu/ or short sale..................

These are the guidelines per FannieMae/ FreddieMac for buying again and the timeframe needed to wait after, foreclosure, deed in lieu, and short sale on conventional loans revised specifically for the market conditions the way they are.


Fannie Mae/ Freddie Mac two private US-based mortgage buyer powerhouses, have set new guidelines to protect business interests and to further safeguard its buyers from foreclosure. The fresh set of policies will affect borrowers who have loan applications submitted after August 1, 2008.

What factors affect the waiting period?

A waiting period is the time from the completion of the foreclosure until the time when buyer decides to purchase a new home. Under the new rules, the length of waiting before one is approved for a conventional loan would depend on two factors – the kind of foreclosure and the extenuating circumstances.

Waiting Period under the Different Kinds of Foreclosure
Given these new considerations, the length of time before one can buy a home depends on the kind of foreclosure:

Foreclosure – 5 -7 years
Foreclosure which has extenuating circumstances – 3-7 years
Deed-in-lieu of foreclosure – 4-7 years
Deed-in-lieu of foreclosure with extenuating circumstances – 2-7 years
Short sale – 2 years

Extenuating Circumstances
Factors beyond a person’s control are called documented extenuating circumstances. Fannie Mae/Freddie Mac lessens the waiting period if a borrower is affected by the following uncontrollable factors:

Death (not the borrower’s)
Job transfer
Sickness
Accidents which result to severe injury

Additional Guidelines:

Fannie Mae/ Freddie Mac, also have additional guidelines for its buyers. Borrowers should look towards buying a primary place of residence. This means that rental or vacation houses are not considered.

Aside from this waiting period, the following may also required by Fannie Mae/ Freddie Mac for some loans:

a FICO score in the required minimum
a 10% down payment



FHA loan guidelines are a little more lenient than conventional guidelines

Foreclosure/Short Sale 3 years after foreclosure has been completed
Chapter 7 Bankruptcy 2 years after charge off
Chapter 13 Bankruptcy 1 year (everything must be paid off)



Veteran Administration (VA) loans typically take up to two years after a foreclosure, short sale or bankruptcy. The borrower(s) must provide proof that there is no outstanding debt. Credit must be re-established along with an explanation letter and full VA entitlement.



Some lenders will not allow a mortgage within 7 years if you are applying with the same lender that the foreclosure or short sale occurred through. They probably have a bad taste in their mouth from the previous mortgage